Preamble

The House met at half-past Two o'clock

PRAYERS

[Mr. SPEAKER in the Chair]

Oral Answers to Questions — HOME DEPARTMENT

Small Prisons (Outside Working Parties)

Mr. Wingfield Digby: asked the Secretary of State for the Home Department whether he will review the number of outside working parties at smaller gaols like Dorchester; and whether the percentage of prisoners allowed on them is less than 15 years ago.

The Secretary of State for the Home Department (Mr. Roy Jenkins): Outside working parties from all closed prisons have been reviewed. I regret that statistics are not available to enable comparisons to be made with the position 15 years ago.

Mr. Digby: Will the right hon. Gentleman make the policy on these outside working parties a little clearer? How far is it left to the discretion of the governor, and how far does it depend simply on the availability of outside work, and how much on the needs of prisoners?

Mr. Jenkins: It depends on a combination of factors. Outside working parties are most important from the point of view of the economy of prisons. This Question refers only to small prisons. In Dorchester, for example, with a total population of 182, 21 are currently employed outside, but all the factors the hon. Gentleman mentioned are taken into account.

Betting Offices

Mr. Arnold Shaw: asked the Secretary of State for the Home Department whether he will institute research on the

personal and social consequences of the establishment of betting shops.

The Under-Secretary of State for the Home Department (Mr. Dick Taverne): My right hon. Friend wishes first to await the results of the research into the incidence of gambling, with particular reference to betting offices and casinos, which is being undertaken by the London School of Economics, supported by funds obtained by the Churches' Council on Gambling.

Mr. Shaw: While welcoming the possibility of such research going on, may I ask my hon. and learned Friend whether he would agree that in view of the growing public disquiet on this matter a real investigation might take place at the present time?

Mr. Taverne: There are a number of questions one would like to know the answers to, but I think one should first await the results of this research, which is looking at the profitability of betting offices in relation to the social characteristics of an area and includes a social survey of the incidence in different parts of the country of all kinds of gambling.

Dr. Winstanley: Would the hon. and learned Gentleman agree that if the persons inside the betting shops were visible to people outside, such as wives and employers, this would have a beneficial effect on absenteeism? Would he consider planning regulations along those lines?

Mr. Taverne: We can certainly look at the question of glass doors and open windows.

Telephone Tapping

Mr. Winnick: asked the Secretary of State for the Home Department if he will review existing practices of authorised telephone tapping in non-criminal matters.

Mr. Roy Jenkins: I have nothing to add to the statement made by my right hon. Friend the Prime Minister in answer to Questions on 17th November last.—[Vol. 736, c. 634–41.]

Mr. Winnick: Is my right hon. Friend aware of the deep disquiet which exists in the country at the ever-increasing amount of telephone tapping, perhaps for political or for divorce reasons? Would he really


not agree that it is time telephone tapping ceased in this country once and for all?

Mr. Jenkins: No; I do not accept my hon. Friend's premises. I can assure him that the present practice conforms fully with the recommendations of the Committee of Privy Councillors which reported in 1957. I have nothing to say beyond that.

Mr. Alexander W. Lyon: Is my right hon. Friend aware that the Question does not refer to the kind of practices which were dealt with by the Committee of Privy Councillors but rather with the invasion of privacy by people who are not authorised to be used for telephone tapping? Would he look into that?

Mr. Jenkins: I think, with great respect to my hon. Friend, that this Question refers to authorised telephone tapping, though there is on the Paper another Question which refers to unauthorised tapping.

Sir T. Beamish: asked the Secretary of State for the Home Department if he has completed his study of the implications of unauthorised telephone tapping; and if he will now introduce legislation to make this practice unlawful.

Mr. Roy Jenkins: I am keeping a close watch on the position, but I have at present no firm evidence to indicate that legislation would be appropriate.

Sir T. Beamish: As the 1957 White Paper clearly suggested that Parliament might wish to consider whether the unauthorised tapping of telephones ought to be made an offence, and as there have been technical advances since then which make tapping easier, and probably more widespread, surely there is a clear-cut case for making unauthorised tapping unlawful?

Mr. Jenkins: I think one has to be satisfied that there is a substantial evil, and I think that there may well be, but one also has to be satisfied that legislation could deal with it effectively. I am open to receive representations, and to receive any evidence about the prevalence of the position if the hon. Gentleman wishes to send it to me.

Mr. Alexander W. Lyon: Now that we have reached the proper Question, may I put my supplementary question

and ask my right hon. Friend whether he is aware that in a number of recent cases, particularly divorce cases, judges have cast strictures on inquiry agents who have used telephone tapping or bugging devices to collect evidence, and that it is this kind of incident which is on the increase? Would not my right hon. Friend agree that the best way to deal with this matter is to institute a civil action for damages, rather than a criminal prosecution? This might be the better way of dealing with it.

Mr. Speaker: Questions must be brief.

Mr. Jenkins: I shall certainly look at that, but I think that it would be strictly outside the scope of the Home Department.

Scotland Yard (Narcotics Division)

Mrs. Renée Short: asked the Secretary of State for the Home Department what plans he has to strengthen the Narcotics Division at Scotland Yard.

Mr. Roy Jenkins: I have nothing at present to add to the reply which my hon. and learned Friend gave on 24th June to a Question by my hon. Friend, the Member for Wallsend (Mr. Garrett). —[Vol. 730, c. 163–4.]

Mrs. Short: My right hon. Friend will be aware that there is very deep and increasing concern about the risks which young people are running in connection with drug addiction. Would he consider this to see if it is possible to have social workers attached to the Narcotics Division to work particularly among young people?

Mr. Jenkins: I will certainly consider my hon. Friend's suggestion. As she knows, and as the House knows, the squad was increased in strength in March last year, and the Commissioner is anxious to see how this increase in the strength works out. As to the second point, I will look at it.

Mr. Moyle: Would my right hon. Friend agree that in the Metropolitan area many drugs are pushed from purportedly private unlicensed and unregistered clubs, and that it is these uncontrolled outlets which cause great difficulty to the police? Would it not be prudent to increase the strength of the police on this class of work?

Mr. Jenkins: I think it may be, but we have made this substantial increase in the strength of about 20 per cent. during the course of 1966. Certainly, neither the Commissioner nor I have a closed mind upon it or regard this as the final figure.

Drug Addicts

Mrs. Renée Short: asked the Secretary of State for the Home Department when he intends to set up a central register for drug addicts.

Mr. Nigel Fisher: asked the Secretary of State for the Home Department whether, in order to control the increase in narcotic addiction, he will consider the compulsory registration of addicts with a view to their isolation and the prevention of transmission to others.

Mr. Roy Jenkins: The Home Office already maintains a record of known addicts. The compulsory notification of addicts would require legislation, and I hope to be in a position to make an announcement about this shortly.

Mrs. Short: May I thank my right hon. Friend for that reply, and may I remind him that this and many other recommendations of the Brain Report are eagerly awaited by the House and the country as a whole?

Mr. Jenkins: I am fully aware of the urgency of the problem.

Mr. Fisher: Is the right hon. Gentleman aware that many responsible people feel that three or four times as many addicts exist in this country as are known and notified to his Department? As a high proportion of them become addicted through friends who are themselves already addicts, would not registration and subsequent isolation help to prevent the spread of what is becoming almost an epidemic?

Mr. Jenkins: I am not sure that I would like to be taken as accepting the exact proportions mentioned by the hon. Gentleman, but I am well aware that there must be more addicts than are known to my Department. It is for that reason that I am anxious to proceed with the implementation of the Brain recommendations as soon as practicable.

Mr. Hogg: Would it help the right hon. Gentleman in his negotiations for Parlia-

mentary time for his legislation both on drugs and clubs to know that it would receive a sympathetic welcome from this side of the House?

Mr. Jenkins: I am grateful to the right hon. and learned Gentleman, and I shall certainly take that into account.

Obscene Publications Act

Mr. Thorpe: asked the Secretary of State for the Home Department what proposals he has for legislation to amend the Obscene Publications Act.

Mr. Roy Jenkins: I am considering the need for amendment but am not yet in a position to make a statement.

Mr. Thorpe: Is it within the recollection of the Home Secretary that when the hon. Member for Birmingham, Stechford, as he then was, to his great credit, introduced the Obscene Publications Bill, the Conservative Law Officers of the day gave an undertaking that, wherever there was a question of literary merit and possible forfeiture because of the basic freedoms involved, there would be a right to trial by jury under Section 2 of the Act? In view of recent private prosecutions, Section 3 procedures have been adopted, and there have been summary trials. Does not the hon. and learned Gentleman agree that that defeats the purpose of the Act?

Mr. Speaker: Order. Hon. Members must keep their supplementary questions short.

Mr. Jenkins: I am aware of the difficulty which has arisen, and it is precisely for that reason that I am considering the position.

Mr. Hogg: Would the right hon. Gentleman accept that that legislation would be less uncontroversial than that to which I promised a welcome on the last Question?

Mr. Jenkins: I accept that it might not be entirely non-controversial, but it might not be entirely controversial in the strict party sense.

Mr. St. John-Steyas: Leaving aside what the Conservative Law Officers may or may not have said, would not the Home Secretary, who has responsibility in this matter, agree that, in all cases where a substantial issue of liberty is


raised, there should be an opportunity of trial by jury?

Mr. Jenkins: I am grateful to the hon. Gentleman for underlining the truth of the latter part of my reply. I accept the fact that there is considerable force in that argument.

Local Government Elections

Mr. Whitaker: asked the Secretary of State for the Home Department whether he will introduce legislation before the next local elections to prohibit anybody voting more than once in such elections in the United Kingdom.

The Minister of State, Home Office (Miss Alice Bacon): No, Sir.

Mr. Whitaker: As some 150,000 voters in the country, even outside Ulster, enjoy more than one vote, and as local elections are outside the terms of Mr. Speaker's Conference's investigation, will my right hon. Friend introduce one man, one vote into this country?

Miss Bacon: My hon. Friend's Question related to legislation before the next local elections, but, as he will know, Mr. Speaker's Conference and the Electoral Advisory Conference are engaged at present in a review of the law relating to Parliamentary elections. Local government electoral law will have to be considered subsequently.

City of London (Local Government Elections)

Mr. Whitaker: asked the Secretary of State for the Home Department whether he will introduce legislation to put local elections in the City of London on the same basis as elsewhere in Great Britain.

Miss Bacon: This will, for all practical purposes, be the position if the City of London (Various Powers) Bill, now before Parliament, becomes law.

Mr. Whitaker: Would my right hon. Friend not agree that franchise in the City of London makes Ulster seem almost democratic by comparison? Will she set up this investigation into local electoral franchise immediately so that we can have majority rule in London?

Miss Bacon: Perhaps my hon. Friend is aware that, only last week, the City of London (Various Powers) Bill received

a First Reading in another place and will be considered subsequently here and by the appropriate Committee.

Frank Ellis Mitchell

Mr. Boyd-Carpenter: asked the Secretary of State for the Home Department how many escapes or attempted escapes had been made by Frank Ellis Mitchell from institutions in which it was sought to detain him prior to his escape from Dartmoor on 12th December, 1966.

Mr. Roy Jenkins: Between 1947 and 1950 Mitchell absconded four times from Borstals. He also escaped from Rampton Hospital in 1957 and from Broadmoor Hospital in 1958. He attempted to escape from Rampton in 1958 and, as part of a mass break-out, from Hull prison in 1962.

Mr. Boyd-Carpenter: Can the Home Secretary say whether his present instructions permit the allowing out of working parties of prisoners with this kind of record of escapes and attempted escapes?

Mr. Jenkins: The right hon. Gentleman will be aware, if he has studied the Mountbatten Report, as I am sure he has, that it said that there was much to be said in support of the decision to allow Mitchell to join an outside working party, although not an honour party. One has to bear that in mind. In addition, one has to bear in mind the passage of time and that, in the case of most prisoners, one has to look forward to some release date.

Mr. Farr: Would not the right hon. Gentleman agree that, where a system exists which permits a prisoner to make so many attempts to escape, there must he something seriously amiss with it?

Mr. Jenkins: It is a system which has existed for a very long time. It goes hack to 1947. I agree that there are certain things about the system which we should improve, and I am endeavouring to do that.

Mr. Hogg: Will the right hon. Gentleman jog the memory of his right hon. Friend the Leader of the House about his promise to give Government time for a debate on the Mountbatten Report?

Mr. Jenkins: I am looking forward to that debate with anticipation which is as eager as that of the right hon. and learned Gentleman.

Police Duties

Mr. Marten: asked the Secretary of State for the Home Department what is the estimated proportion of time spent by the police in England and Wales on administrative duties and on-the-beat duties, respectively; and if he will make a statement.

Mr. Roy Jenkins: National figures are not available but I would refer the hon. Member to the statistics for a number of forces set out on page 313 of the First Report from the Estimates Committee 1966–67. These show that about one-third of the total duty time in those forces was taken up by on-the-beat duties; it is more difficult to draw conclusions about the time spent on administrative work.

Mr. Marten: Could the Home Secretary express an opinion about the suggestion in the Report of the Police Manpower Working Party that there should be appointed at a high level civilian administrative officers to police authorities to start a structure of service which would relieve policemen of routine paper work?

Mr. Jenkins: I am anxious to follow up all the recommendations of that Working Party dealing with the use of civilians of both high and less high qualifications where they can usefully relieve the police of duties which can be done without police training in a general sense.

Mr. Mapp: Will my right hon. Friend bear in mind the proportionate volume of police time which is occupied in regulating traffic, and consider whether, in those circumstances, in the highly efficient police force that we want, some of those duties might not be allocated in a different way and so augment the police service generally?

Mr. Jenkins: Yes. I am also aware of the value of traffic wardens in relieving the police of some duties and of the possible desirability of extending their powers and functions.

Secondhand Oil Heaters

Mrs. Joyce Butler: asked the Secretary of State for the Home Department if, in view of the number of cases recently of fires and deaths caused by secondhand

oil heaters, he will send a circular to local authorities drawing their attention again to their powers to prosecute those who sell secondhand oil heaters in the course of business.

Miss Bacon: One effect of amending Regulations made last June is that the Oil Heaters Regulations, 1962, now apply to all oil heaters offered for sale, irrespective of their date of manufacture. Local authorities were informed at that time that this provision had been introduced to facilitate enforcement of the law, especially in the case of secondhand heaters. I do not think a reminder is needed at present.

Mrs. Butler: In view of the fact that the majority of accidents involving oil heaters appear to be caused by their lack of maintenance or improper use, such as using them for cooking, there is value in drawing the attention of local authorities to the kind of publicity campaign which the Borough of Lambeth has introduced recently. Would the right hon. Lady think again about sending a circular to remind local authorities of their powers in this respect?

Miss Bacon: If necessary, we shall do so. However, we have done this once, and there has been a considerable amount of publicity through the Royal Society for the Prevention of Accidents, the Fire Protection Association, the oil appliances manufacturers, local authorities and home safety committees. In a number of areas where there are large immigrant populations, advice has been issued in languages such as Urdu, Greek and Turkish, so that a great deal has been done and is being done.

Mr. Arthur Lewis: Is my right hon. Friend aware that on three occasions recently there have been serious fires in my constituency, when kiddies have lost their lives, because these heaters have been knocked over? As there is a new device which automatically puts out the flame when the lamp or the fire is knocked over, will my right hon. Friend do something about seeing that it is recommended to be included on all new heaters that are manufactured?

Miss Bacon: My hon. Friend has a later Question about that, when I shall answer it.

Child Care

Dame Joan Vickers: asked the Secretary of State for the Home Department how many children have been taken into homes, or placed in foster homes, during the years 1964, 1965 and 1966; and what has been the cost for each of these years.

Miss Alice Bacon: As the Answer contains a large number of figures I will, with permission, circulate it in the OFFICIAL REPORT.

Dame Joan Vickers: I shall be interested to see the figures which the right

CHILDREN IN THE CARE OF LOCAL AUTHORITIES IN ENGLAND AND WALES


(Figures for 1963–64 and 1964–65 are extracted from the published statistics (Cmnd. 3063). Statistics for 1965–66 will be published shortly.)



Financial years



1963–64
1964–65
1965–66


A. Number of children admitted to care during the period (Note (a))
51,810
56,659
54,471


B. Cost of maintenance in children's homes and foster homes (Note (b))











(1) Average number in local authority homes
19,645
19,848
19,773



£
s.
d.
£
s.
d.
£
s.
d.


(2) Average weekly cost of (1) per child
10
13
11½
11
0
10
12
3
3


(3) Average number in voluntary homes
4,178
4,423
5,115


(4) Average weekly charge paid by the local authority
£
s.
d.
£
s.
d.
£
s.
d.


in respect of (3) (Note (c))
4
17
1½
4
19
5½
5
18
0


(5) Average number boarded out
31,269
31,618
31,695



£
s.
d.
£
s.
d.
£
s.
d.


(6) Average weekly cost of (5)
2
9
5½
2
12
5
2
16
9


NOTES


(a) The manner in which the children received into care in a particular year were accommodated on admission is not centrally recorded.


(b) The average cost in a particular year is based on all children on whom expenditure was incurred in that year, including those received in previous years. Expenditure which cannot be apportioned between the maintenance of children in care and other functions of children authorities is not included in the calculation.


(c) These figures are the average costs to local authorities: they do not necessarily represent the full cost to the voluntary organisations of maintaining the children.

Genocide Convention

Sir B. Janner: asked the Secretary of State for the Home Department whether he will now introduce legislation to enable Her Majesty's Government to fulfil their undertaking to accede to the Genocide Convention.

Mr. Taverne: I regret that I cannot yet say when it will be possible to introduce this legislation.

Sir B. Janner: Is my hon. and learned Friend aware that an undertaking was given in respect of this a considerable time ago? This really is a very urgent matter, and the world is waiting for a reply to it. When will my hon. and

hon. Lady is to publish. Can she assure me that everything possible is being done to keep families together rather than put these children either into homes, or into foster homes, which is most undesirable if there is any possibility of keeping them in their own homes?

Miss Bacon: I assure the hon. Lady that everything possible is being done by local authorities and by my Department, and I should like to pay tribute to those foster parents who sometimes take whole families so that they shall not be separated.

Following is the Answer:

learned Friend introduce the necessary legislation?

Mr. Taverne: I am afraid that I cannot promise legislation this Session.

Sir B. Janner: Shocking.

Mr. Taverne: A number of Parliaments have passed without this legislation being introduced. I hope that before this Parliament is over my hon. Friend and many others will not be disappointed.

Mr. Hogg: While I freely acknowledge that this Government are not the only Government who have sinned, would not the hon. and learned Gentleman recognise that world opinion simply will not accept a shortage of Parliamentary time as an


excuse for not passing legislation of this kind?

Mr. Taverne: Legislation of this kind will be passed, but, as the right hon. and learned Gentleman knows, there has been tremendous competition for Parliamentary time, particularly in Home Office matters, in this Session.

Mr. Sydney Silverman: I accept that my hon. and learned Friend is in no way responsible for the present state of affairs, but will he bear in mind that ratification by this country of the Genocide Convention is all the more urgent since the Government of which he is a member continue to support actions which can only be described as actions of genocide by their American allies in Vietnam?

Au Pair Girls

Dame Joan Vickers: asked the Secretary of State for the Home Department whether he has studied the recommendations put forward by the Social Committee at the Council of Europe, which were unanimously approved, concerningau pair girls; and what action he is considering taking concerning these proposals.

Sir J. Rodgers: asked the Secretary of State for the Home Department what is the policy of his Department in regard to acceptance of the recommendations of the European Agreement onau pairarrangements which was approved unanimously by the Council of Europe.

Mrs. Joyce Butler: asked the Secretary of State for the Home Department if he intends to implement the recommendations of the Council of Europe onau pairarrangements; and if he will make a statement.

Sir R. Russell: asked the Secretary of State for the Home Department what is the policy of Her Majesty's Government towards the recommendation contained in Document 2072 of the Council of Europe that the Committee of Ministers should prepare Europea Rules for the employment ofau pairgirls, which was passed unanimously by the Consultative Assembly on 29th September, 1966; and if he will make a statement.

The Under-Secretary of State for the Home Department (Mr. David Ennals): The Council of Europe has appointed a sub-committee of officials to study the recommendations of the Consultative Assembly. The United Kingdom is represented on the sub-committee, which held its first meeting in November and is to submit a draft convention to the Committee of Ministers by the end of this year. It is too early to say what the outcome of these discussions will be.

Dame Joan Vickers: May I ask the hon. Gentleman whether, in his new appointment, he has been able to see the previous records? I have led two delegations to the previous Government and to his Government in regard to the great urgency of taking some action about au pair girls. This term is in fact a misnomer. As we in this country take more au pair girls than any other country in Europe, will the hon. Gentleman see that his Government endorse the Convention?

Mr. Ennals: I assure the hon. Lady that I have seen the records of previous discussions, and I am personally interested in this question. I might add that over the last 16 years in my family I have permanently had an au pair girl, amounting to about 50 by now, which has led to many personal and continuing contacts. I am very much aware of the representations which have been made, and certainly a very constructive attitude will be taken by our representative on the official committee.

Sir J. Rodgers: Is the hon. Gentleman aware that there is adverse criticism in all European countries at our reluctance to accept the resolution of the Council of Europe? Will he look particularly into the question whether there should be licensing and control of these au pair agencies?

Mr. Ennals: I do not think that there is any question of having resisted the resolution of the Council of Europe. We have our representative on the special committee which has been set up. We have taken a very positive attitude, and a number of recommendations or draft rules are already in line with our practice. I think that the vast majority of au pair girls who come to this country have a very satisfactory experience, but, as I said


earlier, we will consider all representations.

Mrs. Butler: Is my hon. Friend aware that many of us who also have personal experience of the au pair problem are appalled at the difficulties both for the girls themselves who are at a very vulnerable age, and for the employers, due to our present haphazard arrangements? Is my hon. Friend aware that we would welcome very much anything that he could do to speed up action by his Department to bring us into line with the recommendations of the Council?

Mr. Ennals: With regard to the question of age, at the moment we permit girls of 15 and over to come to this country. The draft rules of the Consultative Assembly suggest 18. I think that the figure of 18 would bring some problems for those girls who are finishing school and want to come here immediately before going on to a university or a job. I shall, however, certainly look carefully at the representations, including those from the association of which the hon. Lady the Member for Plymouth, Devon-port (Dame Joan Vickers) is chairman, the British Vigilance Association, to see what we can do before the next meeting of the Committee, which does not take place until May.

Mr. Speaker: Both questions and answers are getting rather long.

Sir R. Russell: Can the hon. Gentleman do anything to speed up the deliberations of this committee, which seem to be taking an appallingly long time?

Mr. Ennals: It has decided that representations will be made to Ministers by the end of this year, and the official committee has its programme of meetings. The first one was in November. The next one will be in May, and by then certainly the position of the British representation will have been made clear.

Totalisator Betting

Mr. Tilney: asked the Secretary of State for the Home Department whether, in view of the fact that most of the official organisations connected with flat racing and steeplechasing are in favour of the totalisator in preference to bookmaking, some to the total exclusion of the latter,

he will take steps to legalise totalisator betting on licensed harness race tracks.

Miss Bacon: Special considerations apply as regards the horserace totalisator, which is operated by a statutory body for the benefit of the horseracing and breeding industry in general. The 1951 Royal Commission saw objections to permitting additional facilities for totalisator betting on other sports. While I should not now regard their recommendations as conclusive, there is no early prospect of legislation to amend the relevant part of the Betting, Gaming and Lotteries Act, 1963.

Mr. Tilney: Is it not absurd that the statutory board, whose interests are in gallopers, should have to take a decision about totalisators on race tracks for pacers and trotters, which is a new sport since 1951 and which brings in to the State of New York a revenue of 65 million dollars a year in tax revenue?

Miss Bacon: There is something for consideration here, and we do not regard existing legislation as sacrosanct. But there is no early possibility of amending legislation. The proposals already announced for the amendment of the Betting, Gaming and Lotteries Act are confined to Part II of the Act, relating to gaming.

Prison Security (Mountbatten Report)

Mr. Kenneth Lewis: asked the Secretary of State for the Home Department how many of the recommendations of the Mountbatten Report have been implemented; and whether he will make a statement.

Mr. St. John-Stevas: asked the Secretary of State for the Home Department what steps he is taking to implement the proposals of the Mountbatten Report on Prison Security.

Mr. Roy Jenkins: The recommendations of the Mountbatten Report are being worked out in detail and many of them have already been implemented wholly or in part.
I hope to have an opportunity of making a full statement to the House on progress at an early date.

Mr. Lewis: Does the right hon. Gentleman propose to give quick priority to


improving promotion prospects within the prison service, which Lord Mountbatten indicated were unsatisfactory and which he thought to have been unsatisfactory for a very long time, and take into account the fact that the first promotion for any prison officer is after about 16 years? Will he do something to improve morale?

Mr. Jenkins: We are aware of the problem to which Lord Mountbatten drew particular attention, which is a problem we have in hand. It clearly requires negotiation with the Prison Officers' Association and some other people, but we are certainly working on this recommendation.

Mr. St. John-Stevas: Surely the key to better prison security lies in spending more money on prisons. How can the right hon. Gentleman reconcile his good intentions with the fact that the Government have already cut the prison building programme by £1 million and intend to cut it by a further £600,000 in the coming year?

Mr. Jenkins: The cuts to which the hon. Gentleman refers were decided upon before the publication of the Report. In the case of many things one of the easiest ways to solve the problem involves spending more money, but we are confronted with a real problem here, and within the bounds of reasonable economy I hope that we shall not be too cheeseparing in our approach to what is a major national difficulty.

Mr. Victor Yates: Will my right hon. Friend take special note of the statement made by Lord Mountbatten about overcrowding in prisons? There is a serious risk to security here. In view of the alarming conditions under which prison officers as well as prisoners have to exist today, will my right hon. Friend see that this question receives equal priority with the others?

Mr. Jenkins: Yes. I will take very close account of this because I am well aware that in trying to deal with prison overcrowding we are attempting to walk up an escalator which is moving downwards, as the prison population shows a constant tendency to increase.

Mr. Sharples: Will the right hon. Gentleman give priority to the proper

categorisation of prisoners from the point of view both of security and treatment, and also say what steps have been taken to improve the machinery for this?

Mr. Jenkins: We are already putting into effect the plans for categorisation. We were doing that before, and our action has been endorsed by Lord Mountbatten. We are proceeding rapidly on those lines. I would remind the House, however, that the best system of categorisation will involve occasional mistakes as to what is the right category.

Prisons (High-Voltage Electric Fences)

Mr. Dance: asked the Secretary of State for the Home Department whether, in view of the fact that there are not totally secure prisons in this country, he will now consider recommending the installation of high-voltage electric fences round the perimeters of Her Majesty's prisons, following the Mountbatten Report.

Mr. Roy Jenkins: No, Sir. Apart from any other considerations, the hon. Member is under a misapprehension if he thinks this was recommended by Lord Mountbatten.

Mr. Dance: I suppose we shall have to accept that—but is the right hon. Gentleman aware that it is his own feather-bedding of the criminal classes that has done so much to undermine the morale of police and prison officers and to raise the rate of crime, on his own admission, to an all-time record level?

Mr. Jenkins: If the hon. Member wishes to make generalisations on this subject it is a pity, in the first place, that he should have tabled a Question apparently based either upon a misreading or a non-reading of a most important Report and, secondly, that he should have used this to erect something which is entirely unrelated to the general matter.

Mr. Roebuck: Can my right hon. Friend say whether the number of offences increased or decreased during the period when the Conservative Government were in power?

Mr. Speaker: Order. Electric fences are not offences.

Prisoners (Appeal Procedure)

Mr. Iremonger: asked the Secretary of State for the Home Department whether he will adopt the procedure advocated by the Council of "Justice" in discussions with his Department, for dealing with cases where prisoners press their claims to innocence after their appeals have been dismissed either because of new evidence or because of matters into which the courts have failed to inquire.

Mr. Taverne: There have been informal discussions between my Department and the Committee which the Council of "Justice" has set up to inquire into this matter, but I am not aware that the Committee has yet reached any conclusions.

Mr. Iremonger: Will not the Minister acknowledge frankly here and now, with special reference to the appalling miscarriage of justice revealed in the petition for a free pardon for my constituent, Mr. Trussell, that this procedure gives rise to serious and widespread anxiety? Will he refrain from making a decision on this petition until the whole procedure has been reviewed?

Mr. Taverne: I will certainly look into that case, to which the Question does not relate, but I do not see how we can act on the recommendations of the Council of "Justice" until we have them.

Mr. Rowland: In considering this general matter will my hon. and learned Friend take into account the problem presented where, although a man is innocent of some or all charges, he foolishly pleads guilty on the advice of his legal advisers and ends up by being imprisoned instead of being fined?

Mr. Taverne: Certainly we shall look at all the circumstances, although my hon. Friend will realise that the scope for action on the part of the Home Office is limited when a matter has been considered by the courts. If he has a particular case in mind I hope that he will send me the details.

Car Parking Offences (Ilford)

Mr. Iremonger: asked the Secretary of State for the Home Department how many prosecutions have been made by

the Commissioner of Police of the Metropolis for parking offences in King's Gardens and Benton Gardens, Seven Kings, Ilford; and what plans he has for instituting a special force of traffic police to control unlawful parking of cars in residential areas and for other similar purposes.

Mr. Taverne: Between 1st January, 1966, and 11th January, 1967, 10 written cautions and 68 oral warnings were given for causing unnecessary obstruction in King's Gardens, and 41 written cautions and 20 oral warnings in respect of Benton Gardens.
My right hon. Friend is considering suggestions made by the Police Advisory Board Working Party for making the best use of available manpower by extending the powers and functions of traffic wardens.

Mr. Iremonger: I thank the Minister for that information, but is he aware that the residents of this area are fed up with the constant evasion and buck-passing that has met their protests, and that old and young people are in real danger in this area because of parking offences? Will he urge the Commissioner to take more effective action when he issues these cautions?

Mr. Taverne: The Commissioner has considered this matter and has decided that statutory waiting restrictions would not be appropriate in these two gardens, as they are residential streets which are not important from the point of view of through traffic. Nevertheless, to minimise the inconvenience, of which he is aware, the employees of the Plessey Company have agreed to park on one side of the road only. I hope that that will help.

London Airport-Central London (Taxicab Fares)

Mr. Boyd-Carpenter: asked the Secretary of State for the Home Department what action he now proposes to take to prevent the exploitation of travellers making use of taxicabs between London Airport and Central London.

Mr. Goodhart: asked the Secretary of State for the Home Department what action he proposes to take to stop the practice of charging excessive fees for


taxicabs travelling from London Airport to Central London.

Mr. Roy Jenkins: The Government intend, when time permits, to introduce legislation to extend the control of fares for taxi journeys beyond the current six mile limit to include all journeys within the Metropolitan Police District, including those to or from London Airport.

Mr. Boyd-Carpenter: I thank the right hon. Gentleman for that reply. Am I right in understanding it to mean that once this legislation is in effect the lawful fare will be that shown on the meter and nothing else?

Mr. Jenkins: I think that the right hon. Gentleman is broadly right in that assumption. It clearly remains to be seen what form the Bill takes—and it will have to be debated in this House and it will be subject to Amendment—but the intention is to deal precisely with the problem that the right hon. Gentleman has raised.

Mr. Goodhart: Eighteen months ago a Home Office Minister said that it was intolerable that the British public should be held to ransom and that early action would be taken. Is the Minister aware that the ransom has risen by about £1 a trip since then and that it is urgent that this Bill should be brought forward?

Mr. Jenkins: We endeavoured to make some progress with a Private Member's Bill on this subject towards the end of the last Parliament. Although at one stage the prospects were promising, later on it foundered. That is the reason why —without giving a precise undertaking when—I am introducing legislation.

Criminal Injuries Compensation Board

Mr. John Hynd: asked the Secretary of State for the Home Department what is the total amount expended to date in compensation payments under the Criminal Injuries Compensation Board; and how many victims of violent crime have benefited to date from these payments.

Mr. Roy Jenkins: Up to the end of 1966, awards totalling £1,087,881 were made to 3,150 victims.

Mr. Hynd: Is my right hon. Friend satisfied that these awards have been

properly distributed? Is he aware that it has been reported that, for example, considerable awards, amounting to thousands of pounds, have been paid to people who have been knocked down by cyclists in parks in which cycling is prohibited? Is that the intention of the Act and would he consider such matters to represent crimes within the meaning of the Act?

Mr. Jenkins: I am not aware of large, over-generous sums having been paid out in such circumstances, but I will look into that point.

River Thames (Flood Precautions)

Mr. Gresham Cooke: asked the Secretary of State for the Home Department what special precautions are being taken in connection with warnings of possible flooding, particularly in the London area, at the times of very high tides on 27th February, 1967, and again on 28th and 29th March, as the possibility of a North sea surge arising out of equinoctial gales on the latter dates must be taken into account.

Mr. Tavern: There are standing arrangements for the issue of flood warnings as recommended by the Departmental Committee on Coastal Flooding in 1953. Flood warnings will be issued on these dates in the areas concerned, including the London area, if the need should arise.

Mr. Gresham Cooke: Does the Under-Secretary recall that on 10th December, 1965, there was a very high tide which brought the water to within an inch or two of the top of the Terrace wall of the House of Commons? Does he further recall that on that occasion we were taken completely by surprise, that some parts of London were flooded and that the warnings that were issued were inadequate? As we are reaching the time of year when high tides occur, will he give an assurance that special warnings will be given about these dates?

Mr. Taverne: I assure the hon. Gentleman that special warning will be given about these dates. The system has been revised since the incidents of December, 1965, to which the hon. Gentleman referred, and there is no reason to suppose that the present warning system will be inadequate.

Mr. Wellbeloved: Is my hon. Friend aware that his Department carries a very heavy responsibility for warning the residents of London of the possibility of flooding? Is he aware that the G.L.C. development at Thamesmead, which is in my constituency, places 60,000 more people at risk? Will he undertake to press his colleagues in the Government to pluck up their courage and take a decision on the provision of a Thames flood barrier?

Mr. Taverne: I will certainly pass on my hon. Friend's remarks about a barrier, but to answer his question about giving warning, the warning given to local authorities is now a considerable one. It is a warning of something like five hours, while the warning given to residents is about 2¼ hours. As I said, we consider this to be satisfactory.

Several Hon. Members: rose
—

Mr. Speaker: Order. Mr. Gresham Cooke. Question No. 26.

Mr. A. Royle: On a point of order. In view of the fact that my constituency suffers from flooding from the River Thames, may I put a supplementary question?

Mr. Speaker: Many constituencies may so suffer, but we must get on.

Petrol Pumps (Model Code)

Mr. Gresham Cooke: asked the Secretary of State for the Home Department if, following the lead given by the Greater London Council, he has now authorised the use of the automatic latched petrol nozzle in the model code on Dangerous Substances; and whether he will also include the use of self-service petrol pumps.

Miss Bacon: Licensing authorities were informed on 12th January of an amendment to the existing model code providing for the use of this device at attended filling stations. The appropriate technical committee, on which the licensing authorities and the oil industry are represented, has not yet completed its study of the use of self-service pumps.

Mr. Gresham Cooke: As some local authorities seem reluctant to follow the

lead given by the Greater London Council in authorising the use of the latched nozzle, would the right hon. Lady say whether the circular which went to all local authorities was couched in clear terms?

Miss Bacon: As far as I am aware, that is so. However, if the hon. Gentleman has any evidence which suggests that the contrary might have been the case, I hope that he will let me have it.

Prison Buildings (Expenditure)

Mr. Rose: asked the Secretary of State for the Home Department how much money has been spent on prison buildings during each of the last five years.

Mr. Roy Jenkins: As the Answer contains a number of figures, I will, with permission, circulate it in the OFFICIAL REPORT.

Mr. Rose: Will my right hon. Friend take advantage of one of the useful by-products of the malicious Press campaign in regard to prison escapes—the way in which it has drawn attention to the need to spend more money on prisons? What steps is he taking to replace such antiquated prisons as Dartmoor and Strangeways, which is in my constituency?

Mr. Jenkins: I would like to replace many prisons, some of which are 100 years old and some of which, like Dartmoor, are 150 years old. One of the great problems is the mounting prison population, which presses on such replacements as we can make. I hope that, as a result of the recent concentration of public attention on this issue, we shall be able to make some progress.

Sir D. Renton: Was not the prison programme announced by the then Home Secretary in 1958–59 to provide increasing expenditure on prison building over the following 10 years? In view of the fact that the crime wave has increased steadily since then, would the right hon. Gentleman say how he justifies postponing or cutting back any part of that programme?

Mr. Jenkins: As I told the House previously, we are looking at the matter in the light of the Mountbatten Report.

Following is the information for prison service establishments in England and Wales:


Financial year
Amount £


1962–63
5,248,229


1963–64
6,317,635


1964–65
5,198,747


1965–66
4,325,676


1966–67
4,910,000 (a)

NOTE.—(a) provision in financial estimates.

Finches (Import)

Mr. Dobson: asked the Secretary of State for the Home Department whether he will consider restricting the importation of finches into this country.

Miss Bacon: No, Sir. I do not know of any sufficient reasons for such a restriction.

Mr. Dobson: Is my right hon. Friend aware that, although a large number of these birds are imported into this country, the mortality rate among them is very high indeed? Is there not a paradox in this situation; that whereas, under the Protection of Birds Act, 1954, such birds as greenfinches and goldfinches cannot be sold alive unless close ringed or bred in captivity, nothing is being done about imported birds?

Miss Bacon: My hon. Friend appears to be an expert on this subject. I am aware of the keen interest he takes in it. As he knows, finches have been imported into this country for many years. The number of finches imported is believed to account for more than half the total number of birds imported. I am aware of what has happened in respect of some of the birds but as my hon. Friend knows, the question of the safety of birds carried by air is a matter for my right hon. Friend the President of the Board of Trade.

PRIME MINISTER AND PRESIDENT DE GAULLE (DISCUSSIONS)

Mr. Marten: asked the Prime Minister if he will make a statement about his official visit to Paris.

Sir Knox Cunningham: asked the Prime Minister if he will make a statement on his official visit to the President of France.

Mr. Bruce-Gardyne: asked the Prime Minister what discussions he had with President de Gaulle during his visit to Paris regarding reform of the world monetary system and the nuclear defence of Western Europe; and if he will make a statement.

Mr. William Hamilton: asked the Prime Minister if he will make a statement on the progress made to date in his discussions with the leaders of the European Economic Community countries.

Mr. Boston: asked the Prime Minister if he will make a statement about the discussions he has had so far with the French Government about Great Britain's possible entry into the European Economic Community.

Mr. St. John-Stevas: asked the Prime Minister whether he will make a statement on his recent talks with the President of France.

Mr. Ashley: asked the Prime Minister if he will make a statement on his recent discussions with the French Government.

Sir D. Walker-Smith: asked the Prime Minister if he will make a statement on his visit to the President of France with particular reference to discussions on the possible amendment of the Treaty of Rome in the event of a British application to join the European Economic Community.

Mr. Wall: asked the Prime Minister if he will make a statement on his meeting with President de Gaulle.

Mr. Rankin: asked the Prime Minister if he will make a statement on his Common Market discussions with President de Gaulle.

Mr. Blaker: asked the Prime Minister if he will make a statement about his recent official visit to France.

Mr. Biffen: asked the Prime Minister if he will make a statement on his visit to Paris and the talks conducted with President de Gaulle to assess the possibilities of British Membership of the Common Market.

Mr. Henig: asked the Prime Minister (1) what conversations he has had with the President of France on the subject of the North Atlantic Alliance;
(2) what adjustments Great Britain is seeking in the European Economic Community's common agricultural policy as a condition for entry.

Mr. Roebuck: asked the Prime Minister whether he had any discussions with President de Gaulle during his visit to Paris about the possibility of France signing the test-ban treaty.

The Prime Minister (Mr. Harold Wilson): With permission, I will answer this Question and Questions Nos. Q2, 03, Q6, Q9, Q10, Q12, Q13, Q15, 017, Q21, Q22, Q23, 024 and Q25 together.

Mr. Longden: On a point of order. As this will be the first of several occasions on which the Prime Minister will wish to report on his foreign tour, may I seek your guidance, Mr. Speaker, in view of the fact that answering so many Questions together must be inconvenient at Question Time. Would it not be more convenient for the right hon. Gentleman to answer them at the end of Questions?

The Prime Minister: Further to that point of order. As the House will be aware, Mr. Speaker, difficulties arise when so many Questions on the same subject appear on the Order Paper—difficulties for the Chair and difficulties from the point of view of how many Questions should be grouped together. We would be grateful for your guidance, Mr. Speaker, about the question of supplementary questions, in view of the possible interference with the rest of Question Time. I do not think that it would be appropriate for me to make a statement on each of the separate visits after Questions.

Mr. Speaker: The Prime Minister indicated that he wishes to answer 15 Questions, many of them couched in nearly the same terms, together. The Committee on Procedure recommended in 1965 that the Chair should be selective in calling supplementaries on such occasions. I must be selective now. I am afraid, therefore, that some hon. Members who have Questions down will be disappointed, but I propose to try this as an experiment.

Mr. Heath: Further to that point of order. Would it not obviate this difficulty if the Prime Minister dealt with this matter by way of statement after Questions, as is the accustomed practice, thus leaving longer time for supplementary

questions and so avoiding embarrassment to you and hardship to hon. Members?

Mr. Speaker: I hope that any points of order on this important issue will be raised after the precious quarter of an hour which remains for Questions and which is ticking away. Mr. Marten.

Mr. Marten: Question No. Q1.

The Prime Minister: With permission, I will answer this Question and the others I have numbered together.
From 23rd to 25th January, my right hon. Friend the Foreign Secretary and I visited Paris for discussions with the President of the French Republic, the French Prime Minister, M. Pompidou and the French Foreign Minister, M. Couve de Murville. This, as the House will know, was the second in the series of visits to all the capitals of the six Community countries, during the course of which my right hon. Friend and I are exploring whether or not conditions exist for fruitful negotiations leading to British membership of the European Economic Community. The discussions covered political, economic and financial questions arising in the context of eventual British membership of the Community.

Mr. Marten: Would the Prime Minister tell us something about the French attitude towards sterling as a reserve currency? Does he feel able at this stage to say what are the issues on which the French Government would wish Britain to dissociate itself from America over policy matters if we did join?

The Prime Minister: I think that following these talks, which in many ways went very well, we got to grips with a number of questions. The French Government will now, both among themselves and with their colleagues in the Six, have to consider their attitude, separately and collectively, to the points that were raised.
What has certainly caused one of the difficulties for them is the way in which they see—not the way in which we see—the functioning of the sterling area, which they tend to look upon in institutional terms. We spent a great deal of time explaining to them the functioning of the sterling area and some of the problems which they felt existed. I believe that we


have given them a great deal to think about on this question.
In regard to the hon. Gentleman's second point, about dissociation from America. I should tell the House that I believe that this played a very much smaller part in the discussions than many hon. Members on both sides of the House, to judge from the last debate, would have expected.

Mr. Boston: Would my right hon. Friend accept that no doubt hon. Members in all parts of the House welcome the obvious improvement that has taken place in Anglo-French relations as the result of my right hon. Friend's visit? Would he say to what extent East-West relations formed a part of those discussions and whether developing East-West relations is likely to form a part of any future agreement on E.E.C.?

The Prime Minister: Yes, Sir. That was one of the main subjects in our discussions. I believe that both sides felt very strongly that if the other difficulties can be overcome—and I do not underrate how formidable they are—the position that a Europe more united and more industrially strong could take in improving East-West relations, first within Europe—the concept of the wider Europe which so many hon. Members have supported, as well as the French and British Governments—but also easing East-West relations in a wider area than Europe itself, that this would be one of the strongest arguments for attempting to reach a solution of our difficulties.

Sir D. Walker-Smith: The right hon. Gentleman did not refer to the specific point raised in Question No. 13 in regard to the possible amendment of the Treaty of Rome. Is it too early for him to say whether it is proposed to accept the Treaty of Rome altogether or whether Her Majesty's Government are going to seek any amendment, especially to modify some of the supranational and bureaucratic provisions of the Treaty which do not have regard to the special position and needs of this country?

The Prime Minister: It is too early to give the general Government position on many of these issues, which we shall be discussing with the Heads of the Governments of the Six. So far we have made only two of the six visits. In regard

to the Treaty of Rome, I stated the position of Her Majesty's Government in answer to a supplementary question put by the right hon. Gentleman the then Leader of the Liberal Party on 10th November. That is still our position. That is the position on which we have been discussing this matter in the two visits we have so far had.

Mr. Rankin: Assuming that the talks proceed as happily as they appear to have proceeded at the last two meetings, would my right hon. Friend say whether or not he is giving any thought to the possibility of making application this year for the opening of formal negotiations on the Treaty?

The Prime Minister: That is a question with which I dealt in that supplementary answer on 10th November, when I said that the purpose of our visit was to ascertain whether conditions existed or did not exist for us to take a more formal decision than was possible in the absence of this information. Certainly I would feel that the first two visits have gone reasonably well—in some respects better than might have been expected. I certainly feel, regarding the discussions which we had in Paris, that the atmosphere is now very different than it was three years ago.

Mr. Sandys: Is the right hon. Gentleman aware that there is general agreement that his first two visits have made good progress. [Interruption.] Is he aware that great satisfaction has been caused on the Continent by the emphasis which he has placed on Britain's readiness to play her part not only in the economic unification but also in the political unification of Europe?

The Prime Minister: I thank the right hon. Gentleman and while it is no secret that he and I do not see eye to eye on all questions—and certainly I do not always agree with all of his speeches—I welcomed the tone of his speech at Strasbourg on Tuesday.

Mr. St. John-Stevas: May I congratulate the Prime Minister on his speech at Strasbourg, when he spoke for the entire nation, and may I ask him now to scale the heights of statesmanship further by making it quite clear that Britain intends to sign the Treaty of Rome, subject only to the necessary mechanical adjustments


that have to be made and the transitional arrangements?

The Prime Minister: I do not think it is necessary for me to go beyond what I said about the Treaty of Rome in my answer to that supplementary question on 10th November and in the speech I made at Strasbourg on Monday, in which I dealt with this question in some detail.
As to our final attitude, we must await the result of the further four visits, after which we shall be able to look at the situation following the six visits as a whole, and when the Six have had a chance of discussing it among themselves. We can then see how British, European and world interests can best be served.

Mr. Heath: Can the Prime Minister say what area of agreement was found to exist between himself and President de Gaulle on the political organisation of an enlarged Community and any defence arrangements to go with it? Secondly, is the Prime Minister seeking to ensure that there are clear solutions to such problems as he mentioned, like the sterling area and international indebtedness, before he decides to embark on negotiations?

The Prime Minister: On the latter question of the sterling area, I think I should say that there was a very clear attitude on the part of the French Government about the question of sterling and the parity of sterling which helps to clear up a lot of misunderstandings about the French position of last year. So far as that is concerned, most of the issues raised are matters for the I.M.F. and the Group of Ten and for discussion in other directions.
I felt, however, and I was not surprised to find, that there were feelings which, I think, are based on misunderstandings about what the sterling area is about, what sterling balances are and the position of sterling as a trading currency. We did everything we could in the time to help to reassure French doubts about, as they would perhaps feel, the irreconcilability of sterling as an international currency with what we were talking about, namely, Britain's relationship to Europe.
As to political questions, it is certainly the case that in Paris political matters on both sides were stressed at least as fully,

and possibly more fully, in the very widest sense, than purely economic matters. It was not considered appropriate, I think the House would agree, to discuss at this stage the question of the future political structure of Europe in relation to things like the Fouchet plan, and so on. That might be a matter for discussion in or even after the negotiations, and we want to be in on that.
Defence played very little part, a much smaller part than perhaps some of us, on both sides, had expected in the debate in November.

Mr. Thorpe: While recognising that these talks were purely explanatory in nature—[HON. MEMBERS: "Exploratory."]—and exploratory, may I ask the Prime Minister what measures he proposes to take to consolidate any gains made in Rome and Paris? Would he, for example, consider the appointment of a roving ambassador in Europe charged specifically — [Interruption.] — accepting that the task of any Liberal is more to bring about conversion in this country than in Europe to the idea of going into the Common Market? Alternatively, would the Prime Minister consider the appointment of a specific official in our embassies in the countries of the Six who would be particularly charged with Common Market matters?

The Prime Minister: The hon. Member is right in saying that these talks have been both exploratory and explanatory. So far as roving is concerned and visiting the capitals of the Six, my right hon. Friend and I have been treating this matter with very great urgency. I very much doubt whether an individual ambassador to go round the Six in the next few months would add to what we have been able to do.
We want to keep the political momentum of this approach but, of course, we shall have to consider our whole deployment in terms of Ministers, ambassadors and officials if and when we get into direct negotiations.

Mr. Shinwell: Why not send me?

ZAMBIA

Mr. Wall: Q4. Mr. Wall asked the Prime Minister what communications he has received from the President of Zambia; what


further assistance has been requested; and what reply he has sent.

The Prime Minister: Exchanges between myself and other Heads of Government are confidential.

Mr. Wall: Would the Prime Minister confirm that £14 million has been offered to Zambia? Does he regard this as aid or compensation? Can the Prime Minister say whether it has been tied to the purchase of British goods and how much the British taxpayer is being expected to pay during the coming year to underwrite the Zambian economy?

The Prime Minister: The hon. Member will be aware of the discussions and negotiations which my hon. Friend the Minister of State, Commonwealth Affairs had in Zambia last summer and that agreement was reached in principle, which I hope is now being activated, to enable us to make arrangements for a sum of money of this order to help Zambia maintain her economy due to the extremely serious effect on her economy of the actions taken in Rhodesia, supported by the hon. Member.
I believe that we in this House have a real obligation to Zambia while—[Interruption.] I have just said "of this order"—£14 million. Much of it is help in personnel and equipment and a great part of it is being spent in this country. This is essential to enable British interests to be maintained.

Mr. Hooley: Can my right hon. Friend say what discussions are going on in United Nations Agencies to encourage the international community to underwrite the financial problems that are arising from the Central African conflict?

The Prime Minister: There have been discussions among a number of United Nations members and this also played a leading part in the Commonwealth Prime Ministers' Conference, when we made an appeal to some of our Commonwealth colleagues, which some of them have indeed taken up, to give all the help they could to Zambia. At one point I suggested to my Commonwealth Prime Ministerial colleagues that if the length of speeches at that conference were proportionate to the aid given to Zambia, we might finish the conference somewhat earlier. As to actual help, how-

ever, some countries have helped and some have not so far done so.

Mr. Ronald Bell: Has any recent communication from the Government of Zambia to the Prime Minister referred to the unilateral abrogation by that country of the Barotseland Agreement of 1964? If so, what representations has the Prime Minister made in reply?

The Prime Minister: I have said that communications with Commonwealth Heads of Government are normally confidential, but I can safely say that this is not a question which has recently been discussed between us. If, however, the hon. Member will put down a Question to my right hon. Friend, he will, no doubt satisfy him with his Answer.

PRIME MINISTER (QUESTIONS AND STATEMENTS)

3.30 p.m.

Mr. Speaker: I did not deal with points of order during the quarter of an hour of the Prime Minister's Questions because that would have taken away precious time. I am very willing to listen to points of order now. Did the Leader of the Opposition wish to raise one?

Mr. Heath: Gladly, Mr. Speaker, if you invite me to do so. It has now become evident that all except two minutes of Question Time today was taken up with the Prime Minister giving an account of his journey to Paris, which was invaluable to the House. May I now suggest, however, through you, Mr. Speaker, that it would be a great convenience if future Questions on such visits after the Prime Minister's return could be answered after Question Time. That would give us much greater opportunity of talking to the Prime Minister about these matters.

The Prime Minister: Further to that point of order. I will, of course, consider the right hon. Gentleman's suggestion. There were, however, a great number of Questions which had been put down and I thought it right to answer them at Question Time. In fact, we would, I think, have been justified in withholding any information until all six visits had been completed and we could look at the situation as a whole. While we ourselves attach equal importance to all the six visits—to the other four as well as


the two that we have made—it may be that there will be less interest in the House, as I am sure there will be in the Press, in some of the other visits compared with the one which has attracted so much attention this week.
If, however, there is a strong desire that we should have more time for Questions after subsequent visits—which would, of course, mean taking time away from something else—I will certainly consider whether that would be more convenient to the House.

Mr. Jennings: May I seek your further guidance, Mr. Speaker? It is perfectly obvious that on a matter of this importance, when Questions are grouped, no back-bencher other than those who have put down Questions can get the opportunity of asking supplementary questions. [HON. MEMBERS: "Wrong."] I take that as an ordinary supposition. Would it be possible on this occasion, Mr. Speaker, for the Prime Minister to make a further statement now, even if he were only to say, "I have no further statement to make", to allow back-benchers to put questions which are uppermost in their minds at the present moment?

Mr. Speaker: We are considering a very important matter. If I may deal with the first point raised by the hon. Member, he will have noticed that when I called supplementary questions among those whom I called was somebody who did not have one of the Questions on the Order Paper. The Select Committee said that putting down a Question on the Order Paper did not give a prescriptive right to an hon. Member to be called.
The problem to which I am trying to address myself and on which I am seeking advice from the House is that the time allowed for Questions to the Prime Minister, which to some hon. Members are the two most important quarter-hours of the week, can be entirely monopolised by one issue if hon. Members put down a tremendous number of Questions on the same subject.
What I have suggested to the House this afternoon is that I might be allowed to call some supplementaries not only from hon. Members who have put down Questions, but from those who have not put down Questions, and then to move off that issue to other issues, because in

the same quarter of an hour there are other questions which hon. Members want to put to the Prime Minister.
I remember an occasion, for instance, when Vietnam, which many hon. Members regarded as an important issue, remained on the Order Paper week after week because it was never reached since earlier Questions to later ones on the same topic had taken the whole of the time. I would want at some stage to move on to some other Question on the Order Paper. This was what I sought to do this afternoon.

Sir A. V. Harvey: Further to the point of order. The House has not been told anything further this afternoon, Mr. Speaker, than we were told on television at the Prime Minister's Press conference last night—

Mr. Speaker: Order. That is not a point of order. It is a point of criticism.

Sir A. V. Harvey: I am now coming to my point of order, Mr. Speaker. Surely, Parliament has a right to expect to be able to question the Prime Minister without a follow-on from Press conferences in Paris.

Mr. Speaker: That is not a matter for me. It is not a matter of order.

Mr. Rankin: Would it not be better, Mr. Speaker, to leave this matter in your hands just now instead of the House rushing in to create precedents and make decisions for a matter which may not continue over long?

Mr. Speaker: I think that the House will take note of that observation.

Sir Harmar Nicholls: Following the point of order raised by my right hon. Friend the Leader of the Opposition, I gather, Mr. Speaker, that if the Prime Minister had conceded the request contained in that point of order by saying that he would willingly answer on these points after Question hour, that would have been acceptable to the Chair.
If that be the decision of the Chair, would the Chair bear in mind that in putting these Questions it is not only the value of the Prime Minister's Answer that is important, but the value of Parliament's view in the sort of questions which hon. Members put to him. Therefore, even if, for very good reasons,


the Prime Minister cannot give a clear answer to the questions, at least some value comes out of the material contained in the questions that are asked.

Mr. Speaker: There is no question of what is acceptable to the Chair. The House is its own master, and Ministers make statements in the form they choose. The problem with which the House is confronted would, however, exist even if the Minister in question made a statement after Question Time when there were as many as 15 or 16 Questions on that topic on the Order Paper. Exactly the same problem of selection would arise.

Mr. Wall: May I ask you to clarify two points, Mr. Speaker? One is the very great difficulty which back-benchers have of putting down Questions to the Prime Minister which are likely to be answered. They have to be put down at least three weeks beforehand. The second is the difficulty of a backbencher who withdraws a Question to the Home Secretary, who was at the top of the list today, to get a Question to the Prime Minister and then is not called but somebody who appears later than him on the Order Paper is called. I appreciate the difficulty of the Chair, but may I ask you, Mr. Speaker, to appreciate the difficulty of back-benchers?

Mr. Speaker: I appreciate that very real difficulty, which selection might help to overcome.

Sir Knox Cunningham: May I ask your guidance, Mr. Speaker? Your predecessor in the Chair indicated that if a Question after Q10 was put down to the Prime Minister he would use his discretion about whether a supplementary question would be allowed. You have indicated today a different policy. I put down a Question Q2 and would have liked to ask a supplementary question. Could you explain the new policy, Mr. Speaker, and whether this is a change?

Mr. Speaker: I hope that the House will never ask Mr. Speaker why he selects. If he is asked to select, the House must have confidence in him.

Sir Knox Cunningham: Your predecessor indicated the policy, Mr. Speaker, and I am asking if you would

indicate whether you are changing the policy of your predecessor?

Mr. Speaker: I thought I had made quite clear the line I have suggested. I hope that it commends itself to the House. If it does not, then we must go back to the position we were in before this afternoon. I hope that we can move on.

Mr. Maude: Further to that point of order. May I respectfully submit that the suggestion you have dealt with does not quite meet the problem of backbenchers here? Surely it used to be the custom that when the Prime Minister or the Foreign Secretary undertook an important foreign visit a statement was made which would give back-benchers the opportunity to question him.

Mr. Speaker: Order. That is not a point of order.

Mr. Maude: rose—

Mr. Speaker: Order.

Mr. Maude: May I go on to that—

Mr. Speaker: Order. Mr. Speaker has no power to compel a Minister to communicate information in the way the hon. Member wants.

Mr. Maude: No, but further to that point of order. If you, by your Ruling, make it possible or easier for this matter to be taken during Question Time it comes out of back-benchers' time instead of Government time which a Question being answered after Question Time does. This is the important point.

The Prime Minister: Further to that point of order, Mr. Speaker. When these visits were announced they were really regarded as one consecutive operation. Indeed, it could have been possible to have toured areas of Europe in one extended visit. One reason why it is being done in the way it is is so that, apart from the last two visits, I shall not be away from my place at Question Time to hear and answer Questions. The result is that this means six separate visits, and I intended, when I got back after the sixth, to make a more extended and full statement to the House.
We are taking some risks in view of the circumstances we have in mind by getting into so much questioning, and I


have gone much further today than I did at the Press conference, as one would expect to do in this House. I have gone further in answering questions than I did at the Press conference in Paris. There are some difficulties about making statements about a visit to one particular country when other countries are to be visited. I have already given instructions today for there to be put in the Library of the House what was said at the Press conference so that hon. Members may see that I have not said more there than I have here.

Mr. Heath: May I ask whether we are clear in understanding that by your Ruling, Mr. Speaker, you are indicating that if the Prime Minister deals with a visit by answering Questions and a number of Questions are put down, a very large number of Questions, you yourself would like to call only a small number of supplementary questions so that we may move on to other Questions? If that is your suggestion, I should say that we on this side of the House would not find it satisfactory.
I also find it impossible to accept the Prime Minister's view that all six visits should be treated as one. This is not in accordance with the custom of the House in relation to visits by Prime Ministers and Foreign Secretaries on matters of such importance. It is not compatible with the dignity of the House that members of the Press and television interviewers should have opportunities of putting questions to the Prime Minister which we ourselves do not have in the House of Commons. [Interruption.] In view of what the Foreign Secretary is muttering under his breath, I should say that on every single occasion when I returned to this country from a negotiation overseas I made a statement after Questions and answered every question which was asked in the House.

Mr. Speaker: Most of what the right hon. Gentleman has said is a matter between him and the Prime Minister—the political criticism, and so on. What I said at the beginning of this question had reference not to the visit by the Prime Minister but to Questions to the Prime Minister when a number of hon. Members were asking the same Question which could take the whole of Question

Time allotted to Prime Minister's Questions and prevent other hon. Members who also wish to ask Questions of the Prime Minister from doing so and deprive them of the opportunity. If the House does not want that, I do not insist on it.

The Prime Minister: Further to that point of order. I am sorry further to take the time of the House. Studying this list of Questions much earlier, I knew that it meant big problems to you, Mr. Speaker, and the House and for whoever is answering Questions, but the point to be made is that this does not arise out of individual visits. This has been a question which I have been facing, and I think it faced the right hon. Gentleman my predecessor for some time. It has very often happened that on a single question there are eight, 10 or 12 Questions, some of which are put down at the very last minute, perhaps in the hope of getting in supplementary questions and in identical and repetitive terms. This puts on me a problem of whether to group or not, and it puts more difficult responsibility on you, Mr. Speaker.
I was prepared, as I indicated this morning, if this was seen to be a difficulty to have discussions with hon. Members in all parts of the House and through the usual channels, but your statement this afternoon—and I do not think the right hon. Gentleman has hoisted this on board—suggested that you were following the views of the Select Committee on Procedure, 1965, and in so far as there has been a change it is because of that. Surely, if the House does not agree with the Report of the Select Committee on Procedure, 1965—[Interruption.] The right hon. Gentleman was talking about difficulties when a large number of Questions are taken together and whether Mr. Speaker selects them or not. This has been one of the main problems. I am trying to suggest that Mr. Speaker has followed the advice of the Select Committee on Procedure, 1965. If that is not convenient to the House, it is quite intolerable that you should be taking criticism for this fact.
We are quite willing—[Interruption.] This happens almost every week; it has happened on Vietnam and many other Questions. I am only suggesting that if the House is not happy with what is suggested we would be happy to have


talks with the right hon. Gentleman and any other right hon. Gentleman to see how this growing problem of getting more Questions put down at the last minute can be dealt with.

Mr. Heath: Further to that point of of order. May I make plain that we are not expressing any criticism of you, Mr. Speaker, for following the recommendation of the Select Committee on Procedure as regards a considerable number of Questions by hon. Members on a continuing subject, a matter with which the Select Committee was dealing. We are dealing specifically with the return of the Prime Minister from a visit abroad. There is no criticism of you, Mr. Speaker, but entirely of the Prime Minister for not maintaining the usual customs of the House.

Mr. Speaker: Order. May I assure the House that I did not read anything that was said as criticism of Mr. Speaker. The House has been thinking aloud on a very difficult problem. Representations have come to me from both sides of the House on this. Perhaps the usual channels will have a look at it.

Mr. KWESI ARMAH

Mr. Hogg (by Private Notice): Mr. Hogg (by Private Notice) asked the Secretary of State for the Home Department what are the reasons which led him to release Kwesi Armah and whether he is prepared to make a statement.

The Secretary of State for the Home Department (Mr. Roy Jenkins): I thought it right, in exercising my discretion under Section 6 of the Fugitive Offenders Act, 1881, in this case, to take account of all the relevant circumstances, including the provisions of the Fugitive Offenders Bill now before the House; and that, because the offence of which Mr. Armah is accused is alleged to have been committed in this country, it is open to the Government of Ghana to take proceedings against him here.

Mr. Hogg: Whilst no one would wish to say anything prejudicial in one way or another about a man who has not been tried for any offence, and whilst no one would wish to prejudge the question without knowing what information is available to the Home Secretary,

would he acknowledge that there are serious political questions to be explored here? Would he acknowledge that, whether under the legislative position as it exists or as it may exist, there is a distinction to be drawn between a political offence and an offence committed by a politician? Will he also acknowledge that it is of vital importance, in dealing with independent Commonwealth Governments, not to imply any slur at all upon the integrity or good faith of their assurances or the independence of their judiciary?

Mr. Jenkins: I am most anxious not to imply any such slurs. These cases, as I and my predecessors have found, are extremely difficult. It is extremely difficult to hold a balance between the liberty of the individual and political considerations, but I thought it right to take into account the Bill before the House, and I gave notice of that intention in reply to a Question by the right hon. and learned Member on 23rd June last year. I think Clause 4 of this Bill clearly defines political offences in a very wide sense.

Mr. Michael Foot: Is it not evident that my right hon. Friend has acted strictly in accordance with the views which were expressed by the Official Opposition at the time of the Enahoro case? Will my right hon. Friend take it from me that certainly from many hon. Members on this side there will be no criticism of him for paying proper weight to the rights of the individual in this matter?

Mr. Jenkins: I endeavoured in this case to act in what I thought to be the right way.

Mr. Tilney: Does the Home Secretary agree that many people in Asia and Africa will think that by his decision he has called under suspicion the judicial system of many developing countries in the Commonwealth and that many people in Africa will think that they can get away with impunity with what appears to have been embezzlement and get political asylum?

Mr. Jenkins: I very much hope and believe that such a view will not be widely taken. I hope that the hon. Gentleman will do nothing to lend currency to such a view.

Sir J. Hobson: Which of the provisions of the Fugitive Offenders Bill was the Home Secretary bearing in mind? Was it sub-paragraph (a), (b) or (c)? If it was sub-paragraph (a), how is stealing £30,000 a political offence?

Mr. Jenkins: I was taking into account all the provisions of Clause 4(1).

Mr. Paget: Is it not a basis of extradition that the crime should not be triable in this country? Was not the Fugitive Offenders Act in its origin based upon the fact that the members of what was then the Empire were subjects to the Crown? Are not the Government of Ghana on this occasion being treated precisely as any other independent Government, and is not this really an incident of their sovereignty?

Mr. Jenkins: I think that there would be a very widespread view in the House that the Commonwealth was now a very different entity from the Empire of 1881 when this Act was brought into operation. Also, without necessarily accepting my hon. and learned Friend's premise, I draw attention again to the fact that this alleged offence is triable in this country.

Mr. Hogg: Pursuing that last point, and without in the least desiring to prejudge this issue, at whose instance ought it to be tried? Can the Home Secretary seriously pretend that he would attempt to try a French diplomat who was accused of a comparable offence and whose extradition was sought by General de Gaulle?

Mr. Jenkins: I do not think that any question of diplomatic immunity arises in the case of Mr. Kwesi Armah, who has not a diplomatic position. It is fully open to the Government of Ghana, if they so wish, to take proceedings.

Several Hon. Members: rose—

Mr. Speaker: Order, order.

BUSINESS OF THE HOUSE

Mr. Heath: May I ask the Leader of the House to state the business of the House for next week?

The Lord President of the Council and Leader of the House of Commons (Mr. Richard Crossman): Yes, Sir. The business for next week will be as follows:

MONDAY, 30TH JANUARY—Supply [7th Allotted Day]. It will be proposed that the Winter Supplementaries should be taken formally with the Question being put on all outstanding Votes to allow debate on an Opposition Motion on Services Doctors and Dentists Pay until 7 o'clock.
Afterwards, a debate on Drugs on a Motion for the Adjournment of the House.
TUESDAY, 31ST JANUARY—Third Reading of the Agriculture Bill, which it is hoped to obtain by about 7 o'clock.
Afterwards, Second Reading of the West Indies Bill.
WEDNESDAY, 1ST FEBRUARY—In the morning:
Motion on the Ministry of Aviation (Dissolution) Order.
In the afternoon:
Second Reading of the Consolidated Fund Bill.
THURSDAY, 2ND FEBRUARY—Remaining stages of the Consolidated Fund Bill which, by Standing Order No. 89 will be formal.
Remaining stages of the West Indies Bill, the Road Safety Bill and of the Road Traffic Bill.
FRIDAY, 3RD FEBRUARY—Private Members' Bills.
MONDAY, 6TH FEBRUARY—The proposed business will be:
In the morning:
Motion on the Ministry of Land and Natural Resources (Dissolution) Order.
In the afternoon:
Second Reading of the Fugitive Offenders Bill, which it is hoped to obtain by about 8 o'clock.
Motion on the Southern Rhodesia (Prohibited Trade and Dealings) Order.

Mr. Heath: Is the Leader of the House aware that his commitments to the House are now piling up heavily? He has promised debates on the White Paper on Transport, on Broadcasting, on the Mountbatten Report and on the Plowden Report. The Commonwealth Secretary indicated that he accepted the necessity for a debate on Malta, which we hope the


Leader of the House will confirm. The right hon. Gentleman has not been able to provide any of these debates for next week. Would he now accept pressure to provide them as early as possible and to start dealing with these matters? Would he also undertake to keep up his present record of dissolving one Government Department at every morning sitting?

Mr. Crossman: The answer to the last part is "No". In answer to the first part of the right hon. Gentleman's question, it is true that at this time of the year, as the right hon. Gentleman well knows, there is business the Government have to get through. Most of the discussion takes place on Opposition time or in private members' time. I think I can give an assurance that I see my way to a debate on transport in the near future. I can see some hope for a debate on broadcasting in the near future. I do see the case for a debate on Malta, but I think that it is a little way behind a debate on the Mountbatten Report and prisons, which I think is the third priority. Those are the three matters which I can say we are beginning to have plans for.

Mr. Heath: I am delighted to hear the right hon. Gentleman say that he can see forward at all. The question of Malta is a more urgent one, because this involves executive decisions by the Government. I should like him to reconsider that.

Mr. Crossman: This is something entirely for consideration through the usual channels. If it is felt that Malta is a matter of urgency—I personally feel that it is a matter of great importance—I certainly will be sympathetic to rearranging the order of priority in this respect.

Mr. Shinwell: In reply to a Question the other day, my right hon. Friend the Minister of Technology informed the House that legislation to implement the Geddes Report on Shipbuilding would be forthcoming very soon. When will the legislation be introduced? If the legislation is to be delayed in view of many problems that now confront the British shipbuilding industry, will my right hon. Friend arrange to afford time to enable the House to debate this subject?

Mr. Crossman: My right hon. Friend is obviously very well informed about

the progress of the legislation. My right hon. Friend the Minister of Technology was correct in saying that the legislation would come soon, but I cannot give a precise date. It is possible that it will be delayed for reasons not unrelated to what my right hon. Friend just suggested.

Mr. Hogg: I note that the Leader of the House considers the Mountbatten Report to have third priority. I ask him to look at the supplementary questions and answers which came from all parts of the House at Question Time today before he finally relegates it any lower.

Mr. Crossman: I am not relegating it. I do not want to give that impression. All these four subjects are important. I was asked to bear in mind that a new subject—Malta—had come up. That was the point I was making. There is now a fourth matter of high priority.

Mr. Wellbeloved: Has my right hon. Friend's attention been drawn to Early-Day Motion No. 340 standing in my name and in the names of some of my hon. Friends, expressing our grave concern at the unacceptable level of unemployment appertaining at the moment?
[That this House expresses its grave concern at the January total of unemployment of over half a million wholly unemployed; feels that this is an unacceptable level; and calls upon Her Majesty's Government to adopt measures that will increase production and ensure full employment throughout the United Kingdom.]
Will he undertake to make time available for his colleagues in the Cabinet to come to the House and make known their immediate and positive proposals for reversing this trend?

Mr. Crossman: I will certainly consider a debate on this subject. I suggest to my hon. Friend that meanwhile opportunity might be able to be found in certain limited regards next Wednesday evening.

Mr. Farr: In view of the further disturbing evidence of a foreign take-over of British business houses and industries which has come to hand today in relation to the Philips/Pye deal, will the Leader of the House consider as a matter of urgency providing time for the House to discuss this series of events?

Mr. Crossman: I would not accept for one moment the hon. Gentleman's suggestion that it is anything but a very healthy change of control which should not be wholly to the disadvantage of anybody, if we are concerned with European relations. As I said before, this is an important subject, and it is one of the general subjects which we might well discuss in a debate devoted to economics, but I repeat that the Opposition also have opportunities for giving time for such debates.

Dr. David Kerr: Would my right hon. Friend note that the continued delay in bringing the leasehold reform Measure before the House is encouraging a good deal of squalid arm twisting by freeholders in respect of leaseholders? Would my right hon. Friend give an undertaking that this Measure will be brought before the House within the next couple of weeks?

Mr. Crossman: I had read in the Press the matters to which my hon. Friend refers. I think that the assurances I gave in a previous capacity, as Minister of Housing and Local Government, may have removed most of the dangers of this kind. Nevertheless, delay is bad and I can tell my hon. Friend that this extremely complicated and important Measure is nearly ready for presentation.

Mr. R. Carr: Does the right hon. Gentleman recall that the Prime Minister gave a pledge last summer that the Ministry of Aviation would not be abolished until the future structure of the aircraft industry had been settled? How does he explain an Order to dissolve the Ministry when, so far as the House and the country is aware, that question has not yet been settled?

Mr. Crossman: That is the kind of point that the right hon. Gentleman can put when he attends the morning sittings.

Mr. Whitaker: In order that Mr. Kosygin may have an interesting debate to hear during his visit, may be debate the Press while he is in the country?

Mr. Crossman: That is certainly a motive for debating the Press which I had not thought of before. I shall bear the thought in mind when considering the business for the week after next.

Mr. Robert Cooke: Will the right hon. Gentleman look again at today's business? He has put down on the Order Paper as the second Order an important Motion relating to private members' time. That, I take it, is not exempted business, so if the Iron and Steel Bill debate goes to Ten o'clock we shall not be able to debate that Motion. Will the right hon. Gentleman take the Motion off the Order Paper today so that it can be discussed properly on another occasion?

Mr. Crossman: I should be surprised if this Order were something which we wanted to debate for long. It is specifically designed, as the hon. Gentleman knows, to enable back bench Members to have more time in which to choose their subjects and to make them more topical in debate. I had assumed that this was totally uncontroversial and was of assistance to the House. However, if I did find that there were differences in points of view, this is something that I would consider, but I have yet to learn that there are major matters to be debated on what I thought was of self-evident advantage to back benchers.

Mr. Mackintosh: Will the Leader of the House take notice of the two Early-Day Motions on the subject of the raising of overseas students' fees in British universities?
[That this House regrets the decision of the Secretary of State for Education and Science to impose increases of over 200 per cent. in the fees to be paid by overseas and Commonwealth students studying in British universities, deplores the announcement of this decision in an answer to a written Parliamentary Question; and calls upon the Leader of the House of Commons to arrange an early debate on the subject to enable hon. Members to express their views on the matter.]
[That this House believes that the Department of Education and Science should consult with the Ministry of Overseas Development and other appropriate Ministries with a view to revoking the decision to treble fees for overseas students so far as those from developing countries are concerned.]
This, as the right hon. Gentleman knows, is causing grave alarm in this country and abroad. We should like time to discuss this matter if it is not possible to do so next Wednesday.

Mr. Crossman: I advise my hon. Friend to look carefully next Wednesday. This is a Supplementary Winter Estimate and, unlike the other two big debates on the Consolidated Fund, this is traditionally narrowly interpreted. He ought to look carefully here to see what he can or cannot debate, since he cannot normally range as widely on this debate as is possible on the other two. I believe I am right in saying that, Mr. Speaker.

Mr. Deedes: Is the right hon. Gentleman aware that, on the question of morning sittings, some hon. Members are in Standing Committees on Wednesday mornings and will be in increasing difficulty? Indeed, some Committees upstairs and the proceedings in this House are running increasingly in parallel. Will the right hon. Gentleman give thought to the possibility of arranging some improved voting system for Committees upstairs? This problem will increase.

Mr. Crossman: I thank the right hon. Gentleman for having given me notice of that question. It has given me time to reflect upon it. We chose Mondays and Wednesdays for morning sittings and, although Monday is by no means the most convenient day, it was chosen to avoid coinciding with our Committee work upstairs. I agree that there is a little Committee work on Wednesdays, but not very much. However, I further agree that as we develop this will become a serious problem to consider, and in any plan that I may put forward next Session for a much more drastic reorganisation of our business as a result of the Report of the Select Committee on Procedure, this is the kind of careful timetabling question that we ought to bear in mind. I am grateful to the right hon. Gentleman for having raised this point.

Mr. Lubbock: Would the right hon. Gentleman say when he expects to introduce a Motion for the establishment of a new Select Committee on agriculture, science and technology?

Mr. Crossman: I apologise in the case of agriculture. I think the hon. Gentleman will find that a Motion on science and technology is on the Order Paper—
[That, to enable this House to establish more effective scrutiny of scientific and technological matters, a Select Committee, with the normal powers to hear evidence

and make reports to the House, should be appointed to examine the annual reports of the Privy Council for Research, the Atomic Energy Authority, the National Research Development Corporation and similar bodies.]
In the case of agriculture there is a little delay in collecting the final names. They are being collected today. I regret I have not been able to keep fully to my pledge of last week.

Mr. Hector Hughes: Will my right hon. Friend find time in the near future to discuss the recent conversations between the Prime Minister of this country and the Prime Minister of the Irish Republic? This has a very important bearing on the trade relations between the five entities of these two islands.

Mr. Crossman: I would not like to under-estimate the importance of the conversations, but I cannot give my hon. and learned Friend any assurance that they will be discussed next week or, indeed, in a fortnight's time.

Mr. Eyre: Is the right hon. Gentleman aware that last night further last-minute substantial Government Amendments were put down to the Land Commission Bill? In view of the concern expressed by members of the professions who have got to try to cope with this fantastically complicated legislation, will the right hon. Gentleman provide an opportunity next week for the House to debate the urgent matter of the further postponement of the first appointed day?

Mr. Crossman: I will certainly not give an opportunity next week. I have a suspicion that the House would like to feel that there would not be too many more hours spent on the Land Commission Bill.

Mr. Chapman: Is my right hon. Friend aware that the Committee on Procedure will be pleased that within 10 days of the publication of its recommendations one of the recommendations is on the Order Paper for tonight? Could my right hon. Friend give an assurance that a number of small points in the last Report —for example, the recommendation relating to voting procedure, which is a very simple change—can be taken quickly in this way and, I hope, put through unanimously without opposition?

Mr. Crossman: I am grateful to my hon. Friend for raising the matter. However, one sees the difficulty. I tried to do precisely this this afternoon, and then I find one or two hon. Members who feel that this is a matter that they want to discuss. This is a difficulty when one puts forward something which one believes to be absolutely straightforward. If we are to make these minor changes and then discuss them every time they are introduced, it is difficult to find all the time necessary for discussion. I think the House should sometimes trust the Leader of the House to put on the Order Paper a subject arising from a report if it is wholly of advantage to back benchers. Nevertheless, I take notice of the fact that even on something as uncontroversial as this there will be found among our numbers hon. Members who disagree. This is one of our problems.

Mr. Roebuck: Owing to my right hon. Friend's passionate reluctance to change his mind, it is with diffidence that I ask him to be more specific on the question of a debate on the Press. In the House—

Mr. Speaker: Order. The hon. Member must ask a business question.

Mr. Roebuck: In the light of a debate in the other place yesterday, could my right hon. Friend say when we may have a general debate on the Press?

Mr. Crossman: I do not think we ought to decide our business in the light of business in another place. We decide it according to its merits here. I still think that in view of the publication of the Economic Intelligence Unit Report and the fact that it is now before the owners, it would be wise to give reasonable time. I do not regard the Press debate as of equal importance as, say, transport or Malta.

Mr. John Page: Will the right hon. Gentleman appreciate the great importance which is attached on both sides of the House to the new situation arising in Malta since the statement, and will he try to find a full day not later than the week after next so that the new situation can be fully discussed?

Mr. Crossman: I certainly cannot give any kind of assurance about a full day. We might rather have a quick day than

a full day. I shall certainly consider part of a day and I regard it as important.

Sir C. Osborne: Would the right hon. Gentleman look at the whole problem of Questions? Since he and I came to this House 22 years ago the number of Questions has increased enormously. It is almost impossible to get an answer to a Question unless it is put down three weeks before the answer is given. By then the urgency of the matter has often gone. Would the right hon. Gentleman consider this? This affects the rights of back benchers on both sides of the House. I have been cut out twice today very closely—

Mr. Speaker: Order. The hon. Member has made his point.

Mr. Crossman: I do not see what I can do about the keenness of hon. Members to put down Questions. There is a possibility, which the Select Committee has put to us, and it is one of the matters that I want to consider about Question Time. This is one consideration that we shall bear in mind.

Mr. Iremonger: As the time is now approaching when it would be too late to make any observations on this point, would the Leader of the House look at Early-Day Motion No. 350 standing in my name, about the reallocation of Independent Television Authority contracts, and see whether we can have a short time to debate this in the House?—
[That this House notes with concern the announcement by Lord Hill on 21st December concerning the allocation of new Independent Television Authority contracts from July 1968 onwards, which will create new monopoly situations in the Midlands, Lancashire and Yorkshire, and new licences to print money; believes that a better allocation is possible along the lines advocated by the Media Executive Circle and widely accepted throughout the television and advertising industries; and calls upon the Postmaster-General and the Independent Television Authority to reconsider the position before the contracts are due to be advertised in February of this year.]

Mr. Crossman: I did look into this. If I understand the situation aright, the whole question of television contracts is entirely a matter for the I.T.A. I do


not think that it is something on which the House would want particularly to intervene.

Mr. Raphael Tuck: Has my right hon. Friend forgotten the Brambell Report, or is it still in some obscure pigeon-hole? Will my right hon. Friend find time for debating the Report in the foreseeable future?

Mr. Crossman: I have by no means forgotten the Report. I know that my right hon. Friend is concerned not only to discuss it but to consider what parts of it one should legislate for. That is what he is concerned about now.

Mr. English: Is my right hon. Friend aware that before he announced the business for next week there were approximately 14 subjects down for debate on the Consolidated Fund Bill, and will he take steps to ensure that the business for subsequent weeks does not leak out in future?

Mr. Crossman: Perhaps I am slowwitted, but I do not see the imputation. I would have thought it not unreasonable for hon. Members to anticipate here and look at it.

Mr. Kenneth Lewis: As the Consolidated Fund Bill is to be discussed in the afternoon of a morning sitting day, what action does the right hon. Gentleman propose to take to make sure that the House rises early, as we understood was the intention on morning sitting days? Even if we do not have regard for ourselves, we ought to have regard for the staff of the House.

Mr. Crossman: That is certainly something which we ought to bear in mind. The aim of morning sittings, as I explained in the debate on procedure, is to reduce the amount of Government business which impose on the House in the evenings after 10 o'clock and to take all that business in the morning. There are three what I might call potential all-night sittings which, as a long-standing back bencher, I would not in any way seek to limit because they come on the Consolidated Fund Bill, the occasion when back benchers traditionally have their rights. I do not think it is at all inopportune to point out that it is not my aim, as Leader of the House, through morning sittings to deny hon. Members the right to debate on the Consolidated

Fund Bill any grievances which they have. All I did was to point out, that this is a Winter Estimate, and I reminded my hon. Friends who might not have so much experience that they must be careful, because I understand that Mr. Speaker's Rulings in the past have not been as broad with regard to Supplementary Estimates as they have been with regard to others. We must debate only subjects covered by the Supplementary Estimates. It is worth looking at the list which, although considerable, is severely limited.

Mr. Heath: We are grateful for the right hon. Gentleman's undertaking that in no circumstances will his right hon. Friend the Patronage Secretary seek to move the Closure on the Consolidated Fund Bill.

Mr. Crossman: I do not think I said anything of the sort. I was asked whether I would try to stop the proceedings at 10 o'clock that night, and I said that was not the sort of thing that I would do. Perhaps I may say to the right hon. Gentleman that he is very unwise to bring my attention to an inaccuracy in what I said so that I can quickly correct it.

Mr. Bob Brown: Has my right hon. Friend seen Motion No. 346 on the Order Paper? Is he aware that about 215 Members from both sides of the House have now signed this Motion, which has become known as the D'Oliveira Motion? Will my right hon. Friend make time available to discuss the subject, or failing time for an early debate, may we have an early statement on the attitude of the Government towards this quite disgraceful affair which, if not speedily resolved, could become a blot on the history of British sport?
[That this House deplores the colour discrimination introduced into sport by the South African Government and calls on the Marylebone Cricket Club to cancel its proposed tour in 1968–69.]

Mr. Crossman: I am grateful to my hon. Friend for calling my attention to this Motion. We are all grateful to the hon. Gentleman who put it down. I think it represents the views of a very large number of right hon. and hon. Members. Having said that, I would add that I am sure the M.C.C. will pay


attention to what Members think. But it is its ultimate decision to take action itself, having, I hope, paid full attention to what is said here. I gather that the Secretary of State for Education and Science has a Question down for Monday. If it is possible, I would hope to have it taken at 3.30, if it is not reached, to ensure that an Answer is given.

Mr. Ian Lloyd: Is the Leader of the House, who has the interests of back benchers so very much at heart, aware that one recommendation which achieved unanimous support of both parties at the Congressional Committee investigating the work of the United States Congress was that each member of Congress should be provided with a third legislative assistant? In view of the right hon. Gentleman's own remarks on the relationship between Parliament and the Executive, and in view of the mass and complexity of legislation which the Government are now inflicting on Parliament, will he give us an idea of when Her Majesty's Government will consider providing Members of this House with their first legislative assistant?

Mr. Crossman: I do not think that we can complete that in next week's business.

Sir Knox Cunningham: Could the right hon. Gentleman reconsider the choice of a morning sitting day for the Consolidated Fund Bill—it is the choice of the Leader of the House—because it may well mean a 24-hour day for the staff of the House? Would it not be much better to have the Consolidated Fund Bill on a day when there is no morning sitting?

Mr. Crossman: I agree in principle that that is right. We had great difficulty this week. We have a very rigid timetable on the Consolidated Fund Bill, but I will certainly bear that in mind for a future occasion.

Mr. Edward M. Taylor: In view of the right hon. Gentleman's Answer to the hon. Member for Berwick and East Lothian (Mr. Mackintosh), will he allow some time, perhaps in the morning, for a debate on the savage increase in the fees for university students from abroad which will bring hardship to thousands?

Is the hon. Gentleman aware that many hon. Members on both sides of the House consider that it was an outrage for the Secretary of State for Education and Science to make his announcement in a Written Answer on the day before the Christmas Recess? Will he allow time for the House to express its views?

Mr. Crossman: The question about Written Answers should be put to my hon. Friend. On the other question, with regard to morning sittings, this is exactly the kind of statement which I would hope that a Minister would make in the morning, with notice, so that supplementary questions could be asked. This is the very purpose of having Ministerial statements in the morning, and I am glad that the hon. Member sees the point of doing it in the morning. As to the actual subject, I realise that there are strong feelings, but I can give no expectation of a debate.

EARLY DAY MOTION (AMENDMENT CORRIGENDUM)

Mr. Lomas: On a point of order, Mr. Speaker. I wish to draw your attention and that of the House to a mistake in the Order Paper for yesterday, 25th January, in that the Paper gives the names of four hon. Members, my hon. Friends the Members for Lewisham, West (Mr. Dickens), for Glasgow, Woodside (Mr. Carmichael) and for Glasgow, Provan (Mr. Hugh D. Brown), and myself as supporting the Amendment standing in the name of the hon. Member for Louth (Sir C. Osborne) to Motion No. 340.
This is a serious matter, Mr. Speaker, and I completely absolve the hon. Member for Louth from any blame. I have told the hon. Gentleman that I would raise the matter, and I appreciate that these names were put to his Amendment by a mistake on the part of the printers and the Table Office.
The Table Office has courteously given the four Members concerned an apology, and it is, of course, accepted because, like all hon. and right hon. Members, we appreciate the great difficulties, stresses and strains under which those who serve us in the Table Office have to work, and we recognise their wonderful qualities.
This matter need have gone no further, Mr. Speaker, particularly after the insertion in today's Order Paper of a


correction, but for the fact that printed in the Evening Standard last night, in the stop press of the West End final edition —no doubt in good faith—there was a headline saying that the hon. Member for Louth had received the support of four Labour Members. I understand that this has appeared also in other newspapers in the country.
In the circumstances, my hon. Friends and I felt that we had no alternative but to draw the attention of the House to the mistake purely for the sake of the record and for the sake of our own political integrity.

Mr. Speaker: I am extremely sorry that the hon. Members' names were added by mistake to the wrong Motion. I can understand the political embarrassment involved. They will have noted that a corrigendum appears on page 6681 of today's Notices.
Having said that, may I remind the House that business in Early-Day Motions has increased threefold over the last two years and that copy is produced for the printers in a state which is often very diff cult to decipher. It would help to avoid error if hon. Members would indicate clearly which Motion they wish to support when handing in their manuscript and if they would also, wherever possible, use the forms which are available for this purpose.
I am very grateful to the hon. Gentleman for the tribute which he so rightly paid to chose who provide the mass of documentation for the House. [HON. MEMBERS: "Hear, hear."] I know that I can express our gratitude to all of them for the way in which so few mistakes are made in what is done through the night in incredibly difficult conditions.

Sir C. Osborne: Further to that point of order, Mr. Speaker. May I add a word, since the matter affects me? I also was caused certain political embarrassment, and I received further political embarrassment from the fact that, when the hon. Member for Huddersfield, West (Mr. Lomas) was courteous enough to tell me that he proposed to raise the matter with you, Sir, I could not get from him any reason why he should now dissociate himself from such a sensible Amendment.

Mr. Speaker: Order. The embarrassment should be over by now.

Orders of the Day — IRON AND STEEL BILL

Order for Third Reading read.

4.20 p.m.

The Minister of Power (Mr. Richard Marsh): I beg to move, That the Bill be now read the Third time.
I think that at this moment I probably know how Sisyphus would have felt if he had ever managed to get his boulder to the top of the hill. The Bill comes before us today after one of the most prolonged and thorough examinations ever given to a Bill in the House of Commons. To give a few statistics, the Committee Stage filled 2,590 columns of HANSARD, 400 columns more than the previous record set on the Gas Act, 1948, and way ahead of the space occupied by any other major nationalisation Act. The Report Stage lasted for 29 hours and 15 minutes. I am sure that all that must prove something or other, but I am not quite sure what.
I suppose that it could have been described as a vast desert of infinite boredom with the odd oasis of interest, but it is certainly true that the Bill which will leave the House tonight represents the full and carefully considered views of the House of Commons, adopted after taking into account the views of those interested, and, in the light of this very thorough scrutiny, with no Guillotine, it would be quite impossible to justify any delay over the remaining stages of the Bill.
When we started on this very long road nearly six months ago, I posed three questions. I think it reasonable to look again at those questions in the light of what has been done in the past six months to see how far, if at all, developments have taken place affecting the answers to them.
The first question was whether the steel industry should be left to continue as in the past and whether, above all, it was operating as efficiently as all of us would wish. I said then, and I say again now, that there is really no major dispute about the need for big changes within the industry. If anything, acceptance of the need for chance is more real now than it was then. The British Iron and Steel Federation, which has never been among


the leading proponents of nationalisation, itself said in the January 1967 issue of Steel Review that it was necessary
to press on fast with the creation of larger company groupings which are both commercially advantageous in a shorter run sense and provide the base for movement towards that concentration of production into a very few big well located works which the Benson I Report set out as the longer term aim.
My second question was whether or not the industry itself should be relied upon to accomplish these changes or whether it was essential for the State to intervene as the only way of obtaining the changes which every one agreed to be necessary. I claimed then that the industry had had 14 years in which it could have set about making these changes but that, by the time I took office in March 1966, it had not actually started on them. As one example of the value of the Bill which the House has had before it for the last six months there has been more movement and more progress towards rationalisation in this industry than in the previous 12 years. There has been the Benson Committee, the Organising Committee, the Dorman Long—South Durham—Stewarts and Lloyds merger—all examples of changes which are now beginning to develop, in recognition of the fact that changes must take place. People of good will—this has been the feature of the industry—have chipped in to do their part in this direction.
But these changes do not go fast enough or far enough to meet the needs of the situation. The position in the British steel industry today is both serious and extremely urgent. There is not a single company in the United Kingdom with an annual capacity of over 4 million ingot tons. There are four such companies in Europe, eight in the United States and five in Japan. In that sort of relationship, clearly, the position has to be changed rapidly.
I did not believe, and I still do not believe, that the industry would have taken even the measures it has towards rationalisation without the stimulus of nationalisation.

Mr. Nicholas Ridley: Nonsense.

Mr. Marsh: I am merely pointing to the fact that these things did not happen

over a long time and they are happening now. I am sorry; I was not trying to be controversial.

Mr. Ridley: The right hon. Gentleman will be aware that the economics of the 4 million-ton plant only emerged since the discovery that one could make a 350-ton or larger L.D. converter. This came about two years ago. No wonder nothing had happened before then. The need was not there.

Mr. Marsh: The hon. Gentleman will probably make a speech later on if he catches your eye, Mr. Speaker. In the meantime, perhaps he will ponder over this. It is true that new processes were developed two or three years ago, but one is talking here about the Benson Committee which was set up last year. This is a long time afterwards.
My third question was whether, if it be agreed that the State should intervene, this Bill was the best method of achieving the objectives. This has been the nub of the controversy. One point is now clear. There is growing recognition that, even if there are other approaches to the problems of the steel industry, this Bill represents a practical and realistic method of achieving the aims on which there is such wide agreement. The proof of this is to be seen in the attitude of those leaders of the industry who, while opposed in principle to nationalisation, have nevertheless been willing to work wholeheartedly in one capacity or another to make a success of the new arrangements. I would like to say here that the House does right to pay a tribute to people who have come to the conclusion, Parliament having taken the decision, that it was then up to them to work as hard as they could in the interests of the industry and the nation as a whole.
Our debates in the Standing Committee over the last three months ranged over many matters, sometimes over semicolons, sometimes about whether we should meet on one morning or another, sometimes on the powerful point raised by the hon. Member for Wanstead and Woodford (Mr. Patrick Jenkin) as regards Recorded Delivery as opposed to registered letter. But, on the whole, in this long operation our attention has centred upon four main issues, and I shall now say a word about them.
The first was, in many ways, the most important—how to secure the full involvement of the workers in the efficiency of the nationalised steel industry. The industry will face very difficult decisions. It will depend to a very large extent on the degree to which it can convince the people employed in it that their interests lie with the Corporation and persuade them to provide the full advantage and benefit of what knowledge, help and assistance they can give.
It was against this background that we had in Committee one of our best discussions, and, as a result, I decided to re-examine the standard nationalisation provisions relating to worker-management relationships to see whether—this was in response to my hon. Friend the Member for Poplar (Mr. Mikardo)—we had managed to learn anything in the past 20 years. Provision was made, appropriately enough, in Clause 4 for consultation with the trade unions before the Corporation reached conclusions on organisation. I think that this is right because the organisation of the industry is a matter affecting the 300,000 people employed within it. Section 39 of the 1949 Act has been substantially revised to make clear that joint consultation in this industry will be concerned with all aspects of efficiency in the Corporation and the publicly-owned companies, and that those taking part in both negotiating and joint consultative machinery will have all the information which they reasonably need made available to them in advance of the relevant discussions. We talked about this in the early hours of the morning last week, and I said then that this was a new element.
Labour relations within the steel industry are very good. The practices in some of the best companies are probably as good as anywhere else in the world. But there are areas where labour relations leave a lot to be desired.
What is new here is the recognition that relationships between workers and management are not merely the relationship of workers raising complaints and managements finding the answers to them. It could be a relationship—this is my hope—wherein the workers themselves take part in the formulation and production of ideas and become involved in the decisions which have to be made—and

some of the decisions will be uncomfortable decisions in which to be involved.

Mr. Stanley Orme: Some hon. Members met maintenance engineers engaged in an official dispute in the Corby plant in the House yesterday, and were very encouraged by the unsolicited welcome they gave to my right hon. Friend's proposals in the Bill. They felt that if they were already working under those proposals the dispute would not have taken place.

Mr. Marsh: Any comment on that dispute would be embarrassing for a number of reasons, but I think that it is accepted that this would be one way of avoiding disputes.
I hope that we can do more and have people who take part in, and feel themselves identified with, the success of their industry and its long-term prospects. If we can get that degree of identification between workers and their management it will be a very real advantage. But it means that people must stand up and be counted in the light of the unpleasant decisions as well as the happier ones. In an effort to bring shop floor experience into the top decisions, I have appointed Mr. Sid Harris to the Organising Committee for the National Steel Corporation. I think this is the first time a man has been appointed directly from the shop floor to a national post of this type. The experiment is proving very worthwhile.
The second main issue in our discussions was the relationship between the nationalised and private sectors of the industry. There is naturally some uneasiness among companies who will remain in the private sector, and I would like to make it clear where the Government stands. The private sector, although small in relation to the nationalised sector, will consist of about 250 iron and steel companies and about 1,200 iron and steel foundries, with an annual turnover of £400 million to £500 million, and will employ about 200,000 people.
In some of our discussions there has been a tendency to talk of the relationship between the two as if there were a possibility of the poor, virginal, private enterprise sector being raped by the massive monster of State enterprise. We need to ensure that somebody holds the ring between the two, but the private sector


will still be a not inconsiderable body even after public ownership.
On any count, those sort of figures amount to a substantial sector of the national economy, and it would be absurd for the Government having decided that it should not be nationalised, to drive it into the ground. We have therefore made a number of Amendments to the Bill in response to points put forward for the private sector companies, including an important new Clause requiring the Corporation to publish lists of normal selling prices and provisions which make an acquisition of interests by the public sector in the private sector subject to the Minister's consent.
Probably more important than what the Bill says, because I accept the views of hon. Members that it is imposible to meet every point in an Act of Parliament, is the way in which the new relationship is developed in practice. The Minister of Power has production responsibilities for the iron and steel industry as a whole, and it must be his aim, and that of his Department, to conduct those responsibilities in a way which promotes a strong and effective nationalised sector and a strong and effective private sector.
But let us also be clear that that does not mean that the Minister of Power has a responsibility to protect and maintain the sloppy and inefficient. As long as they are efficient, companies in the private sector, like the public sector, have a right to expect encouragement and protection from the Minister, but they are not entitled to a divine right to exist if they cannot be equally commercially competitive.

Mr. John H. Osborn: Can the Minister say what his reaction would be if he finds the public sector either sloppy or inefficient five years after taking it over? What conclusions has he now reached after our discussion in Committee and on Report?

Mr. Marsh: If one finds that any sector of industry is sloppy and inefficient it is up to those with authority to do what they can to change that situation. I am just drawing a distinction which I would not have thought controversial. Hon. Members opposite pressed a great deal, quite rightly, for the protection of the private sector, but that does not mean

that it is entitled to protection against the chilly winds of normal commercial competition. I would not have thought that there would be a great deal of dispute about that.
I want to see in the private sector a strong trade association which will represent its views forcefully to the Government and the Corporation, and I want to develop close and friendly relations between the Ministry and private sector companies, so that we get real understanding of their aspirations and problems. The Organising Committee also envisages that sort of relationship. I therefore hope that the Amendments to the Bill, and this explanation of the Government's attitude, may go some way towards removing some of the private sector companies' misgivings, and that they will join with us in developing co-operative relationships which will help them make their maximum contribution to the economy.
The third big issue was diversification, which came up over and over again in our discussions, because there is a major issue of principle between the Government and the Opposition. We believe that where a diversification will bring substantial economic or commercial advantages to a nationalised industry it should be allowed, provided it does not conflict with wider considerations of the national interest.

Mr. John Peyton: rose
—

Mr. Marsh: I know that "national interest" is a phrase which normally brings the hon. Member for Yeovil (Mr. Peyton) leaping to his feet. I thought that it would.

Mr. Peyton: As I do not intend to speak later in the debate, I rise now, because what I dispute with the right hon. Gentleman, as he knows perfectly well, is that he is necessarily the supreme arbiter of the national interest, although I have come to think that he is a better arbiter than almost anybody else on the Front Bench opposite. I am sorry that I cannot pay him a better compliment than that.

Mr. Marsh: That is the nearest I have got to a compliment from the hon. Gentleman it would be churlish of me to argue about it.
There is a big issue of principle here. We believe that diversification should be


allowed, provided it does not conflict with wader considerations. For that reason the Bill gives the National Steel Corporation the same power to diversify as the privately-owned steel companies, and no more. Indeed, the privately-owned steel companies and steel companies overseas have long enjoyed those powers and often used them, for sound economic reasons. But the use of the powers will be subject to the Minister's consent, thus ensuring that they will be used only in a manner which accords with the national interest. The hon. Member for Yeovil says that that involves a definition being left to the Minister of the day, but that is one of the attractions of being one of the "ins" as opposed to one of the "outs".
The Opposition believe in a rather different view from ours, as was made clear by the hon. Member for Cirencester and Tewkesbury (Mr. Ridley) in a memorable interruption in Standing Committee on 17th November. That was probably one of the shortest speeches the hon. Member ever made, certainly in the Committee, and it was one of the most telling, because it was always difficult to identify exactly the point of difference between the two sides on the issue of diversification.
We had been discussing what is now known in Parliamentary circles as the "Bray letter", about which I shall go no further now. I finished my contribution by saying of diversification:
If it is in the interests of the Corporation and in the interests of the nation, is it right that it should be stopped?
Mr. RIDLEY: Yes.
Mr. MARSH: The hon. Gentleman says 'Yes'. I am grateful to the hon. Gentleman. This is what the argument is about"—[OFFICIAL REPORT, Standing Committee D, 17th November, 1966, c. 649.]
That was a significant exchange.
That is exactly what the argument is all about. If it is in what any Minister of the day, who must take responsibility for so deciding, decides is the national interest, the hon. Member for Cirencester and Tewkesbury could still envisage circumstances where he might well believe differently.
On this basic point there can be no compromise of view between us about diversification. But there is genuine concern, which has been expressed reason-

ably by such bodies as the Confederation of British Industry, that in their diversified activities the nationalised industries, because they are not subject to the disciplines of the market, will be able to act in a way which is not only unfair to their private sector competitors but which may lead to a misallocation of the national resources. I can understand that apprehension, but I think that it is totally misplaced. There are two effective safeguards against the dangers which the C.B.I. fears.
First, as I have made clear, the Government intend to apply to the National Steel Corporation the principles and procedures of the White Paper on Financial Objectives and in fixing those objectives we shall, of course, take into account the desirability of earning returns on the diversified activities comparable to those earned by the private sector. [Interruption.] We will talk later on about the rates of returns we are getting in some sectors of the steel industry on capital investment.
Secondly, we intend, to the maximum possible extent, that separate information about the performance of the diversified activities should be published so that Parliament and the public can judge whether they are being conducted efficiently and in the national interest. We have introduced an important new Clause to require this. In issues like this, while the Government in power have to take the decisions, it is equally right in a democracy that the people should be able to see what is going on. No one is entitled to ask more than that of the Corporation.

Sir Tatton Brinton: The right hon. Gentleman has been putting forward the argument of national interest. Supposing that a nationalised enterprise sees that a chain of hotels is making a good profit. Would the right hon. Gentleman consider it in the national interest that the national enterprise should take over a private business of that kind because of its profitability? Surely the excuse for nationalising the steel industry is that it must be more efficient. The reason was not that it should be able to get into other industries.

Mr. Marsh: One cannot define the national interest because the definition changes with those making it at the time.


It is impossible to reply to the hon. Gentleman's specific point but I would say that any Minister of Power or the Steel Corporation would say that it was not the business of the Corporation to go into the hotel business. A nationalised industry has to judge its diversification by the degree of alignment between the diversified activities. We should feel entitled, just as much as the hon. Gentleman would feel entitled, to challenge the Corporation if it went wandering off into the hotel business.
But I remind the hon. Gentleman that there is a wide range of diversification that we have considered justified by commercial reasons and it would be as reasonable for the Corporation to embark upon such activities as these as it was for the private sector. Indeed, this exchange between us shows the difference of principle between the two sides on this issue. I can see the force of what the hon. Gentleman thinks might happen with nationalised industries.
The Opposition are a little schizophrenic about this matter. On the one hand, they talk about the Corporation having to operate—and there is a lot in this view—on commercial grounds. They say that it must be treated as a commercial organisation. On the other hand, they openly challenge its right to embark on any of the practices which would be deemed as normal form in industry generally. Certainly, they would regard them as justified in the very companies which are being taken over. Yet they do not accept it when there is to be a change of ownership. It is clear that there is little point of agreement between the two sides about this, and I find that factor reassuring.
The fourth issue is the question of our relations with Europe. It really must be obvious now, even to the Opposition, that the Government are sincere in their present efforts to see whether or not there is a basis from which it would be possible to open negotiations for British entry into the European Economic Community. But we cannot be sure yet that our discussions with the Six will lead to a successful conclusion and until we are, the idea that this House should draw up its legislation on a set of rules over which it has no control and in which it played

no part in formulating is stupid. We cannot commit ourselves in our legislation to follow the practices of the Community until such time as we are in direct negotiation with them, and one of the difficulties that the Opposition faced last time in the negotiations with the Six was that they never really understood the difference between unconditional surrender and negotiation.
I repeat that there is no inconsistency between nationalisation as such and the Treaty of Paris, although, whatever arrangements exist for the steel industry —and this is also true of the present arrangements—there would clearly be a problem of adaptation if we joined the European Coal and Steel Community. I have given a good deal of time to this problem and I say that, given the necessary political will, the Bill as drafted is quite reconcilable with membership of the E.E.C.
I recently met members of the High Authority of the E.C.S.C., and we had very valuable discussions about the steps, which are being taken in response to common problems, to reorganise and regroup the steel industries of the Six and in this country, and we are arranging to keep in touch as our thinking and plans develop. But to draft legislation as though we were in already is not sensible.
There has been a lot of humbug about the Opposition's anxiety on this issue and indeed our chances of securing a satisfactory outcome in the forthcoming discussions would, if anyone in Europe still took the British Opposition seriously, be significantly reduced by some of the speeches of right hon. and hon. Members, who have done all they could to convince those with whom we are at this moment talking that this major new Bill and the steps we are taking to bring about the reorganisation of the steel industry constitute a substantial new obstacle to United Kingdom membership of the European Community.
The Opposition claim to be keen on entering the Common Market, but they express the difficulties they claim to see more forcefully than opponents.
For the last four months of our work in Parliament, the Organising Committee, under Lord Melchett, has already been at work. The Committee has proved a superb team, and I would like to pay


tribute especially to the very great help that is being given by those of its members drawn from both the steel industry and outside—both from the boardroom and the shop floor—and also to the help which is being given by the Iron and Steel Board and its staff.
I do not think that the House would wish to underestimate the enormous amount of work which has been done by this group of men, most of whom are not being paid and some of whom were not wildly enthusiastic about the idea in the beginning.
The Committee decided at the start of its work that one of the first priorities should be for as many of its members as possible to visit all the 14 companies scheduled for nationalisation. Lord Melchett has also wished to see as much as he could of the industry's operations on the ground, and he has now toured the great bulk of the steel works that will form the public sector.
These visits to steel works have gone on side by side with a full programme of Committee meetings, including one just before Christmas which I attended. It was a three-day session which, like Standing Committee D, extended deep into the night, beginning on a Friday.

Mr. Michael Alison: Did the right hon. Gentleman stand the members whisky?

Mr. Marsh: I think that perhaps there are some things about Standing Committee D that we should keep to ourselves.
Lord Melchett has kept me closely in touch with the development of the Organising Committee's thinking and, while it would be premature to indicate its conclusions—indeed, no formal report will be available until after the Corporation has taken over from the Committee —I can assure the House that the Committee is well at grips with the central issues of organisation, with the practical arrangements for the establishment of the Corporation and for vesting, and with the other issues which I have referred to it.
Now I turn to the outlook for the steel industry generally. The need for the structural reorganisation of the British steel industry is made all the more urgent by the difficulties now facing it. The

Opposition have asked, "Why the rush?". It is because the position is urgent. It is made the more urgent by the difficulties facing the industry.
These difficulties are worldwide, and it would be unfair to lay them at the door of the steel industry, although the managements tend to vary a great deal. Over the last ten years, world steel-making capacity has increased by 85 per cent. while production has increased by only 66 per cent. As a result, the world surplus of capacity has increased sixfold from 12½ million tons in 1955 to 74 million tons in 1965. This growth in surplus capacity has led to increased competition for international trade at prices sufficient to cover prime costs, but well below those needed to cover total costs.
In the United Kingdom, output in 1966 was 24·3 million tons and capacity utilisation fell to 79 per cent. on average. Imports are likely to total 1·2 million ingot tons compared with 750,000 ingot tons in 1965. Exports last year dropped by over 250,000 million tons as compared with 1965.
The results of all this are reflected in the preliminary figures for the year 1965–66 of 8 major steel companies—Colvilles, Dorman Long, John Summers, Lancashire Steel, South Durham, The Steel Company of Wales, Stewart and Lloyds and the United Steel Companies. The total profits after depreciation but before tax and interest of these eight companies fell from £67 million in 1964–65 to £40 million in 1965–66. Expressed as a percentage of capital employed—and we have heard a great deal about return on capital employed in the public sector—profits on this basis amounted to about 7·5 per cent. in 1964–65 and can be assumed to have fallen heavily during 1965–66. The return is expected in that year to be not more than 4 per cent. as a return on capital employed. This makes some of the arguments about the injustice of reducing the compensation terms look a little thin in the light of some returns being produced at present.
Unfortunately, the outlook for the immediate future is equally gloomy. The world surplus of capacity in the next year or two is likely to be considerably higher than the 14½ per cent. shown in 1965, and even in 1970 it is not expected


to be much, if anything, below the 1965 proportion. The British Iron and Steel Federation thinks that United Kingdom production in 1967 may drop by a further 2 million tons with a capacity utilisation of 70 per cent.
Some relief from these difficulties can be expected as it becomes possible to re-expand the economy. More direct steps are also being taken to deal with the problems of the steel industry. I am discussing with the industry the prospects for steel producton in the light of world surplus capacity and it was agreed at the meeting of the Council of Association on 13th January that there should be urgent discussions on this subject between representatives of the High Authority and of the United Kingdom.
The Corporation will, after vesting, be in a position to initiate a co-ordinated pricing policy and measures to improve efficiency by concentrating output on works with the lowest escapable costs and to study in depth such problems as the effects of fluctuations in steel stockholding in exaggerating the fluctuations in the basic demands for steel. These are things we can do and have the opportunity to do under public ownership.

Mr. Nigel Birch: The right hon. Gentleman talked earlier about the need to have much larger plants. He is now talking about costs. Before he leaves the financial aspect, can he give any idea of what plans he has in mind for starting such major plants and what sort of order of annual expenditure might be required upon them?

Mr. Marsh: If the right hon. Gentleman had been present in some of the earlier discussions, when this matter was gone into at great length, he would be aware that the actual grouping of plants —not necessarily the construction of new ones—is a matter that will be presented in the Report of the Corporation to the Minister. It is under an obligation to produce that Report within nine months after vesting.

Mr. J. H. Osborn: The right hon. Gentleman has referred to discussions with the High Authority for a co-ordinated pricing policy. Is not this a remarkable change of view? While I think that hon. Members associated with the

industry will approve, would not the right hon. Gentleman have opposed this two years ago?

Mr. Marsh: I did not say this. The discussions we are having with the E.C.S.C. are ad hoc discussions to see what can be done. There is no quick answer. The problem of surplus capacity in the world has been with us a long time and it would be stupid to suggest that we shall get a quick, bright answer. We have started discussions to identify the various possibilities to deal with surplus capacity and then to decide how we can do it, possibly by extending the range. The hon. Gentleman has a fixation about the pricing system, as have his right hon. and hon. Friends. They are fast becoming the only people who are as completely attracted by this system as they appear. We have not discussed this aspect with the E.C.S.C. Indeed, the Community includes many members with strong views about the pricing system. The hon. Gentleman has misunderstood the point, however. It was not pricing that I was discussing, but world surplus capacity and ways to deal with it.
But all these measures can be begun but will take time to be effective. The next year or so will be a difficult time for the industry and the Corporation's initial results may well be rather depressing. I had better get that on the record now. [Laughter.] I remind the Opposition that the results from the private sector are nothing to be joyful about at the present time.

Mr. Anthony Barber: What about Richard Thomas and Baldwins?

Mr. Marsh: The right hon. Gentleman does not solve the problem by saying that. This is a serious point. It seems that people in the industry accept the situation with more reality than the Opposition. They accept that there are major problems facing all sections of the industry. It would be a great pity if, when the industry is under public ownership, we do not take a realistic look at the doubtful results being produced at first. The results will be depressing for the first couple of years because the Corporation is taking over a very difficult industry faced with very tough problems. No one sees the industry at the moment


as a good, healthy profit making organisation.

Mr. Michael Foot: If right hon. and hon. Members opposite wish to see how public enterprise can deal with this situation I suggest that my right hon. Friend invites them to come to Ebbw Vale where the publicly-owned steel works is standing up to the difficulties of the industry better than any other steel firm.

Mr. Marsh: It would be a very useful experience, and if they would only be less doctrinaire about these things and be prepared to judge on merit I would be happy to arrange for any group of right hon. and hon. Members opposite to pay a visit.

Mr. Barber: Does the right hon. Gentleman agree with his hon. Friend?

Mr. Marsh: That is a sweeping question, but certainly I agree with him that Richard Thomas and Baldwins has done a superb job in very difficult circumstances.

Mr. Brian O'Malley: Will my right hon. Friend point out to the Opposition that the financial results of the European Federation of Steel Companies are extremely depressing and it is considered that they will continue to be had for the foreseeable future?

Mr. Marsh: There is a tendency among right hon. and hon. Members opposite—they do it as instinctively as a Pavlovian dog—to slang nationalised industries on every possible occasion. I am now putting it on record that the Corporation is taking over an industry which is not in a healthy state in terms of profitability, for reasons which are not its own fault but which are world wide. To overcome these difficulties, the Corporation will need to be tough, hard-headed and efficient and it and the Government and all in the industry will have to be prepared for some hard and unpleasant decisions.
I thought it right to raise this note of warning about the immediate future but the basic objective of the Bill is not just to cope with short term problems but to create a strong, competitive steel industry able to hold its own with the competing steel industries in Europe, the United States and Japan. It is essential in the national interest to push on as quickly

as possible with the creation of this strong competitive steel industry.
My aim now is to establish the Corporation to take over from the Organising Committee very quickly after Royal Assent and to shorten as far as practicable the period between Royal Assent and vesting. The year 1967 will see an end to the apparently interminable argument about ownership and will see the industry working hard and successfully under the new Act to tackle the real practical and economic problems which face it.
We on this side of the House have argued for years the advantages of public ownership for the steel industry. I am more convinced than ever that we were right. It is important to realise, however, that the Bill gives us a chance to solve the problem but does not of itself solve anything. If things continue as they have in the past the effects throughout industry will be very serious indeed. If the Government, the Corporation and all those working in the steel industry take the opportunities which public ownership presents to them, we can build up an industry which will prove that nationalisation of the steel industry, far from being a genuflection to out-dated dogma, was, indeed, the only sensible way of dealing with the industry's problems—and it is a great tragedy that it did not happen years ago.

5.0 p.m.

Mr. Anthony Barber: For reasons which I shall give in a few minutes, I do not intend to speak for very long. It is six months, almost to the day, since this Bill was read a Second time. I readily grant to the right hon. Gentleman whatever satisfaction he may derive from my admission that since then the Bill has been the subject of fairly full discussion. It is about that aspect that I would first like to make a few brief remarks. In its amended form the Bill is the outcome, as the right hon. Gentleman has reminded us, of the longest Committee stage in the history of Parliament and of three and a half days of debate on Report.
Such proceedings imposed a very considerable burden on the Opposition, and it is right that at this final stage in the House I should express my gratitude to my hon. Friends for all their help. I also want to pay tribute to the right


hon. Gentleman in respect of one matter, which I believe is of great importance for the working of Parliament. A Government with a majority of 100 wields immense power and authority, and yet the right hon. Gentleman, when the moment of truth came, was prepared to abandon his programme for the Bill and to grant the Opposition the additional time which we were seeking. Equally, the rules of order of the House and of Standing Committees are such as to place in the hands of the Opposition an opportunity so to frustrate the Government's legislation as to make the work of Parliament impossible. I hope that the right hon. Gentleman and his colleagues in their turn will grant to my hon. Friends and myself the credit for knowing just how far to go in opposing the Bill without abusing the opportunities which are rightly available to a Parliamentary Opposition.
It was never our intention merely to thwart the passage of the Bill into law. At the beginning of a Parliament where there is a Government with a majority of 100, such an exercise would have been politically naive and futile. We sought only two things—adequate Parliamentary time in which to expose to the country what we believe to be a bad Bill, and, secondly, a number of Amendments to the Bill, particularly those providing equity for the 200 smaller iron and steel companies which are to remain under private enterprise. We finally obtained all of the Parliamentary time that we sought, even though in order to achieve this it was necessary in one week to sit on three consecutive days and nights with only five hours' sleep.
As for the Amendments which are now incorporated in the Bill after the Committee stage, and our deliberations on Report, they are by no means all that we wanted, but we are genuinely grateful to the Government for the very considerable concessions which they have made. When the right hon. Gentleman talks about a sloppy and inefficient industry, we are not in the least worried about the private sector. He used those words solely in relation to the private sector, solely in relation to the 200 companies which are not to be nationalised. Our concern is that this new monolithic

organisation may become, over the years, sloppy and inefficient.

Mr. Marsh: I would not want there to be any misunderstanding on the point. All that I was arguing was that while it was reasonable to expect protection for the private sector for fair trading, and general commercial understanding, it was not reasonable and would not be reasonable for it to expect that this gave a divine right to many sloppy and inefficient firms. I believe that sloppy and inefficient firms in British industry should be weeded out, whether in the nationalised or private sector.

Mr. Barber: This is very interesting, because I have never heard any leader of the steel industry nor anyone in all of our debates asking that the right hon. Gentleman should incorporate in the Bill provisions which would safeguard sloppy and inefficient private industry. What we have been arguing is that there should be equity and fair treatment as between the public and private sectors. One of the fascinating things which has just emerged is that while the right hon. Gentleman has said that he will not protect sloppy and inefficient private concerns, he has not told us what he proposes to do if sectors of this public monopoly become sloppy and inefficient and unproductive. What will he do then? We know what will happen, as has happened with all the other nationalised industries, it will continue year after year being protected by the Government and being serviced by the Treasury.
I said that my speech would not be long, and there are two reasons for this—

Mr. Peyton: Before my right hon. Friend leaves that point, does he not think that we ought to be grateful to the Minister for having acknowledged—and he is the first Socialist Minister to do so—the possibility that nationalised industry might become sloppy or inefficient?

Mr. Barber: This is certainly a change, and one can couple that with the apologia of the Minister for the likely way in which the new nationalised industry will develop over the next two or three years. It is pretty clear that the Government are preparing the ground for the sort of difficulties, inefficiencies and all the rest


which we have come to associate with so many of our nationalised industries.

Mr. Marsh: One simple question: would the right hon. Gentleman be prepared to say that he would have thought that under private ownership the steel industry's prospects for the next couple of years were ripe?

Mr. Barber: I would have responded to the right hon. Gentleman if he and his predecessors over the past year or 18 months had pointed out when the industry was in private hands the sort of difficulties which were likely to face it in future. We heard not a bleep about this from them until the Bill came forward.
I was saying that there are two reasons why I do not wish to be unduly long. First of all, I know that there are other hon. Members on both sides of the House waiting to take part in the debate, and secondly, although I would have liked to have put forward a number of alternative proposals for dealing with the industry, on the Third Reading of a Bill I am precluded by the rules of order from doing so.
I have six objections to the Bill. The first is that whatever may be the case for nationalising a public utility or a service industry, as the President of the Board of Trade said, nationalisation is quite unsuitable for a manufacturing industry. One can search the entire industrial free world, but nowhere will one find a country in the 'sixties setting out, as this Bill does, to nationalise 90 per cent. of its iron and steel industry. Indeed, it is the case that 90 per cent. of all the steel produced in the non-Communist world is produced by private enterprise. It is left to a British Socialist Government, for internal party political reasons, to revert in 1967 to the doctrines of half a century ago.
We have been told by the Government that this Bill is based on the assumption that; "greater competition is not the answer." Yet both France and Italy have chosen to organise their steel industries on a competitive basis. The German steel industry is now being rationalised on the basis of four quite separate sales syndicates. The Benson Report, to which the right hon. Gentleman continues to pay tribute, recommended the creation of multi-production groups subject to United Kingdom competition over the whole

range of their output. But the Government, in passing this Bill, are oblivious of the recent experience of our European friends, and blind to the advice of any but the Left Wing of the Labour Party. It was the Prime Minister who used to pretend during the last election campaign that a Labour Government would listen to the voice of industry. I therefore conclude my remarks on this first objection to the Bill by quoting the considered view of the Confederation of British Industry on the proposals in the Bill:
A national steel organisation would stifle enterprise, create inefficiency and eliminate diversity".
So much for all the election poppycock about consultation with industry.
The second objection to the Bill is that it will inevitably make British industry as a whole less competitive in the markets of the world. It is a fact that about 40 per cent. of all Britain's steel output is exported, 20 per cent. directly and another 20 per cent. indirectly, in the form of goods such as motor cars, machinery and so on. Indeed, it is no exaggeration to say that exports of steel and of goods made from steel have spearheaded Britain's post-war export drive.
At a time when, as the Minister has told us again today, there is excess steel capacity throughout the world, the nationalisation proposals in the Bill will inevitably make Britain less competitive. Whatever may be the political and social arguments for and against nationalisation, our whole experience of State enterprises is either that prices increase excessively, or that profitability is depressed. I believe that it is a tragedy that, at a time when by their economic measures they have deliberately put 600,000 men and women on the dole and we are suffering the greatest package of deflationary gloom in our post-war history, the Government should embark on a proposal which will have the inevitable consequence of making Britain less competitive.
This leads me to my third objection to the Bill—the lunacy of proceeding with the nationalisation of steel at a time when Britain is in the midst of a dire economic crisis and living on borrowed money. It was the Chancellor of the Exchequer who sad:
What people abroad believe about us is as important as the truth, especially in relation to the strength of sterling.


He was right. It was a leading New York newspaper which wrote:
If Wilson announces that he's dropping re-nationalisation of the steel industry, that will be a tougher blow to the Labour Party than the wage freeze, but will do more than anything else to restore confidence abroad.
There are many other quotations from The Times and elsewhere which I could bring to the notice of the House.

Mr. Michael Foot: On a point of order. Will it be possible for all of us to discuss on the Third Reading of the Bill international reactions to a nationalisation Measure?

Mr. Deputy Speaker (Sir Eric Fletcher): I think that it would be undesirable, but I hope that the right hon. Gentleman is bringing that part of his remarks to a conclusion.

Mr. Barber: Exactly. I shall. But it is a strange thing if the hon. Member for Ebbw Vale (Mr. Michael Foot) does not believe that the timing of a Bill of this kind is at all relevant to our economic situation and the strength of sterling. If so, he is about the only one in the House of Commons who does not realise that.

Mr. Foot: The right hon. Gentleman misunderstands me. All I was trying to ensure was that if the timing of the Bill and its international implications are proper issues for the right hon. Gentleman to raise it should be equally possible for all of us to debate them. I was not trying to inhibit the right hon. Gentleman in any way. I was trying to make sure how much was admissible on a Third Reading debate.

Mr. Barber: I do not want to pursue the matter, but if the hon. Gentleman will bear in mind, for example, the view of The Times—that the announcement that the Bill was to be brought forward, coming on top of the continuation of the seamen's strike, was likely to do damage to the £—is not relevant, then all I can say is that he has no idea about how things in the world outside actually work. I am deploying arguments against the passage of the Bill now, and I think that this is strictly relevant.
It is a strange paradox that the Labour Government, just because they are pressing ahead with the Bill at this time, have

had to intensify their deflationary measures with all the hardship and unemployment which is now spreading across the country. The sadness of it all is that it need never have happened and the Bill need never have been before the House for Third Reading today. If the right hon. Member for Huyton (Mr. Harold Wilson) were to drop the Bill today, he would still remain Prime Minister. We all know that. If there is one lesson to be learned from the past 12 months, it is that the Left Wing of the Labour Party, in relation to Vietnam and unemployment and the nationalisation of steel, will always sacrifice its principles rather than risk its seats in the House of Commons.
As for compensation; it is an interesting reflection on the integrity of the Government that before the publication of the Bill the best advice which was given to the holders of steel shares was that the Government would cheat them, which is precisely what has happened. But what is of far greater consequence for the nation as a whole is the effect of the Bill's financial provisions on the economy. In 1967 there is in all stock with a nominal value of £1,644 million to be redeemed or converted. Under the Bill £500 million of compensation stock is to be issued to the public. Inevitably—and nobody can deny this—part of the compensation will be spent on consumption rather than be retained in Government stock or transferred into other securities.
In short, the financial consequences of the Bill are inflationary at a time when the Government have decreed that deflation is to be the order of the day. And all this is to happen in a year when Government expenditure is expected to rise by the alarming figure of 6 per cent. and when industrial production is plummeting. It is little wonder that the Chancellor of the Exchequer has told the Prime Minister that he has had enough of his job at the Treasury.
The fourth objection to the Bill is that at the very time when the Prime Minister is making overtures to General de Gaulle and other Europeans to join the European Community the Government are pursuing proposals for the steel industry which—and I weigh my words carefully and I challenge the right hon. Gentleman to deny that this is the case, because I have made very careful inquiries about it—are


inconsistent with the practice of the European Coal and Steel Community.
We have been over this ground on a number of occasions, but always, and again today, the right hon. Gentleman has skated round the issue. Always he has said, and again today, what we all know to be the case—that nationalisation as such is not contrary to the E.C.S.C. But Mr. Deputy Speaker, ask anyone you like from the headquarters of the European Coal and Steel Community and all will tell you that the creation of a single monolithic steel industry representing 22 per cent of the combined E.C.S.C. and United Kingdom market runs completely counter to the existing permitted practice of the Community, and yet that is precisely what the Bill is intended to do.

Mr. Marsh: I have never sought to hide from the House the obvious fact that this produces another matter to be negotiated, but would not the right hon. Gentleman agree that the Bill raises no bigger difficulties than existed with the National Coal Board last time, no bigger difficulties than those presented by the Iron and Steel Board and no bigger difficulties than those which were raised by the proposals put before the British Iron and Steel Federation? Any of those proposals would produce difficulties which we would have to negotiate if we entered the Community.

Mr. Barber: Yes, but it seems a strange thing that, recognising that there were many difficulties with the Steel Board and with the coal industry, now in the midst of these negotiations the right hon. Gentleman should delberately set out to create an industry which he knows will not in fact be acceptable to the Europeans. It is no good the right hon. Gentleman shaking his head. I did not propose to pursue this matter. If he wants to pursue it, then I shall pursue it with him. It was the Minister's predecessor, the Chancellor of the Duchy of Lancaster, who said:
Our proposals would create a single unit of direction with a capacity of about 30 million tons of crude steel a year".
If the Minister wishes to learn more about this, he had better look at the Financial Times of 23rd November last year in which he will see a headline across four columns:

Steel nationalisation could be an obstacle to entry".
The reasoning is there given by Geoffrey Owen, the industrial editor, who, I should have thought, was a fairly respectable individual. If the right hon. Gentleman is still not satisfied, let me quote what Mr. Owen says, which I believe has the ring of truth:
Some stiffening in the powers of the High Authority of the ECSC (which was set up, like the Steel Board in Britain, in conditions of steel scarcity) is probable, and this would be greatly complicated by the presence of the huge National Steel Corporation. Unless the NSC takes the form of three or four competing and largely autonomous groups, it could become an important stumbling block to Britain's entry into the Community.
But we have been told by the Government, by the previous Minister of Power and by the Foreign Secretary that it is not the intention to have three or four largely autonomous and competing groups. We have been told that that is not the purpose of the Bill. This is why we are absolutely entitled, and, what is more, why we are right to point out to the House, that what the Minister is doing is incompatible with what is accepted by the E.C.S.C.
I for one will not stand from the Minister criticism of the Opposition because we point out something which, apparently, he thinks is not generally known in the Labour Party but which is known to every European of any consequence in the European Coal and Steel Community at Luxembourg. The right hon. Gentleman was there the other day. Did he raise this question? Did they tell him that what he was proposing to do was not contrary to the existing practice of the Community. Of course not, because we all know that it is contrary. There is nothing unpatriotic in pointing out what people on the Continent know, namely, that what the Minister is proposing is contrary to the practice in Europe.
The fifth objection to the Bill is that it gives the National Steel Corporation powers to diversify without limit. These powers can be concisely stated. The Corporation is to have unlimited power to diversify its activities, and to engage in any business of any kind—manufacturing, commercial and financial, whether in the United Kingdom or elsewhere in the world, even though that business has


nothing whatever to do with iron and steel.
The Minister—I say this with respect, because I know that he would never wish to mislead the House—made a slip in his speech when he said that the Corporation can do all the things which the several operating companies are permitted to do according to the powers given in their memoranda of association. The powers in Clause 2 go much further than that. The Corporation has power to take over any company in the country and to set up any new company. There is no limit whatsoever on its powers of diversification. I cannot refer to what is not in the Bill, but the consequence of the Bill is that there will be no Parliamentary control or scrutiny of any kind.
The Minister said that the powers of diversification in the Bill are subject to ministerial control and that he would not approve any measure of diversification which was not in the national interest. I agree with my hon. Friend the Member for Yeovil (Mr. Peyton), who has deep suspicions about the phrase "in the national interest". After all, there are hon. Members opposite who do not take the same view as the Prime Minister, who thinks that it is in the national interest deliberately to put people on the dole. Yet this is what the Government are doing. There are differences of opinion about this.
While I trust the Minister's judgment more than that of most, I am not at all sure that he and I would see eye to eye about what was in the national interest in diversifying into fields outside the iron and steel industry. The only explanation we have had from the right hon. Gentleman is that private enterprise does not have to come to Parliament for permission to diversify and therefore why should the Corporation have to do so?
I understand that the Chief Secretary to the Treasury is to reply to this debate. Therefore, let me put to him a question which has gone unanswered throughout our debates. It is a very appropriate question for him to answer. It is in relation to the Minister's idea that the Corporation should be treated no differently from private enterprise in having to come to Parliament for permission to diversify. The question is: does he not agree that

there is all the difference in the world between a company in the private sector embarking on an entirely new venture with a limited amount of risk capital subscribed by shareholders and a nationalised industry spreading into new manufacturing fields with the bottomless purse of the Exchequer available to underwrite every faulty commercial judgment?
We are told that we can rely on the good sense of Minister. That is what the right hon. Gentleman said this afternoon. Let the nation recall the words of the man who is now in charge of our economic policy, the Secretary of State for Economic Affairs:
We "—
he was referring to Socialists, among whom he includes himself—
take the view that public ownership must be the rule and private ownership in certain specialised circumstances the exception.
That is a philosophy which we utterly reject. But that is what right hon. Gentlemen opposite believe, and that is the purpose of Clause 2.
Sixthly, and lastly, it is a fact that the overwhelming majority of the electorate does not want this Bill to be passed. First, the combined vote of the Conservative and Liberal Parties at the last election was greater than that cast for the Labour Party. Furthermore, the most recent Gallup Poll—and hon. Members opposite frequently seek to rely on such polls—shows that only 14 per cent. of voters want the Bill to go through and that the figure even for Labour voters is only 27 per cent.
The Bill is the Prime Minister's pay-off to those who supported him against the Foreign Secretary for the leadership of the Labour Party. It is a Bill to appease the Left Wing. It is a Bill which will make Britain less competitive. It is a Bill which will sap overseas confidence. It is a Bill which will make more difficult our entry into Europe. It is against the national interest, and we reject it.

5.28 p.m.

Mr. Michael Foot: The right hon. Gentleman for Altrincham and Sale (Mr. Barber) has surveyed a very wide area. I hope to comment on several of his remarks. I thank him for stating the matter in its broader context.
I was not a member of the Standing Committee. The rumour was spread that


I was invited to be a member of the Committee and that I rejected the offer. No such offer was ever made. Had I been invited to be a member, I should have been happy to accept. If I had been a member, I might not be wearying the House now.

Mr. Alison: The rumour which we heard was that the hon. Gentleman had offered to join the Committee and that his offer was rejected—precisely the opposite of what he says.

Mr. Foot: I agree with the hon. Gentleman that that sounds much more probable, but even that is not true; it did not happen that way, either.
I was not a member of the Standing Committee, but as one who has had an interest in this subject for many years I should like to begin by congratulating my right hon. Friend on this Measure which he has brought to the House and on the way he has carried it through the House, and on the speech he has delivered today. In my opinion he has fulfilled the pledge which was given by our party at the last election, that this would be carried through, and I think he deserves congratulations on that score.
The right hon. Gentleman the Member for Altrincham and Sale sought to cast aspersions on the integrity of myself, possibly, and some of my hon. Friends, in that he suggested that we were always prepared to sustain the Government in office rather than to pursue the advocacy of our principles. Well, if we had upset the Government during the period between October, 1964, and March, 1966, or even subsequently, as we were invited to do by many hon. Gentlemen on the opposite side of the House, purely in the national interest, of course, if we had taken that course which they advised us upon, we might not be discussing this Measure which we are discussing so agreeably now. There are many things which the Government have done or not done to which we take strong objection, and we shall continue to state our reasons for that, but we have always made it clear that we wished to sustain the Government so that they should carry through their election pledges, and this is one of the principal election pledges which is being carried through, and therefore, for many of us, this is a sweet moment of triumph, and we are very glad to cele-

brate, with all prepared to join with us in doing so.
I should have thought from the complaints from many hon. Gentlemen opposite over recent years they might join us. One of the things they have said is that we must end this terrible uncertainty in the steel industry. Tonight that uncertainty in the steel industry is ended. The future of the steel industry as a great publicly-owned concern is assured. No one need have any more disputes about this at all. This is what hon. Members opposite have said was the position, that the steel industry suffered great difficulties because of the uncertainty. They may now put all their fears at rest, and join in the celebration on that account.
The right hon. Gentleman said that one of the reasons why he objected so strongly to this Measure was because of its international financial repercussions, and many people abroad objected to it. I have read this before. I remember at the time of the run on sterling in July last year the right hon. Member for Enfield, West (Mr. Iain Macleod) also put forward this proposition. He was seeking to examine why the run on sterling had originally occurred, and he advanced the proposition in an article in the Daily Mail that the origin, perhaps, of the run on sterling was the presentation of the Iron and Steel Bill to the House of Commons. I must say that summons up a very strange picture of the mental processes of the gnomes. We can imagine a gnome in Zurich, or wherever it is, coming down to breakfast one morning and saying to his wife, "Do you see, dear, that they have introduced the Steel Bill after all? You will have to take a very different view of that Government in Britain."
That was the proposition clearly advanced by the right hon. Member for Enfield, West, and apparently supported by the right hon. Gentleman the Member for Altrincham and Sale—in a more moderate manner, as we would expect from him—today, that in the opinion of many of those people abroad the financial strength of this country is determined by this Bill. There are no great signs of it; there have been no great disturbances in the last day or two because they learned that the Third Reading of this Bill was going through; there has been no financial crisis, despite all the efforts of hon.


Gentlemen opposite to try to stir it up. No one would under-estimate their efforts to make sure that the financial position of this country should be regarded as unsound.

Mr. Barber: The hon. Gentleman is absolutely right in what he has just said—that the reason why this Government have taken the measures—for deflation, which would not have been necessary, deflationary measures, creation of unemployment, falling production, their approaches to Europe to join the Common Market —are all the consequences, which the Government have taken, to counter the lack of confidence resulting from this sort of Measure. If the hon. Gentleman doubts the words I quoted today I would tell him that I did not use those words. The words I quoted today were from a leading American newspaper. I could have made quotations from The Times, the Financial Times, newspapers in Zurich which the gnomes read, and others, and he will find that I am supported in my view. It may be illogical; the gnomes in Zurich may be stupid. Nevertheless, this is what they believe.

Mr. Foot: If the gnomes of Zurich do believe that, then I agree with the right hon. Gentleman in this at least, that they are very stupid people. This has been one of my complaints against successive Governments, that often to impress very stupid people we have to take stupid action. It has been my complaint against the Government on many occasions. But that does not arise on this Bill. My complaints against the deflationary measures can be stated on other occasions. What I am now arguing I should have thought almost all hon. Gentlemen, however much they may equip themselves with these quotations from these various journals, would agree, that it is absurd to suggest that the introduction of this Measure, which has been known for years to have been a principal measure in the programme of the Government, would have had any material effect on the immediate financial position of the country or the economy of this country, despite, as I say, the efforts of hon. Gentlemen opposite to stir up as much misgiving about the Measure as possible.
They are perfectly entitled, of course, to attack the Measure. I am not com-

plaining on that score. They are perfectly entitled to advance their arguments about the Common Market, that this makes it much more difficult for Britain to go into the Common Market. I think my right hon. Friend has answered that argument. My own answer would be a different one. If it is in fact the case that the conditions for entry into the Common Market are such that it is not possible for the people of this country to bring into public ownership their great industries that would be a further reason, in my opinion, for not seeking to enter such an organisation. That part of the right hon. Gentleman's argument was, I am sure, not aimed at me; if it was, it hit the wrong target, if, indeed, it hit any target at all, and I do not believe it did.
The right hon. Gentleman based his argument also on saying—I think I got his words correctly—that nationalisation is unsuitable for a manufacturing industry as we had no experience of nationalisation in the steel industry. We have, of course. That is why I interrupted my right hon. Friend in his speech. We have had it.

Mr. Barber: I do not wish to join issue with the hon. Gentleman on this but, just to get the record straight, those were not my words. I was quoting from the President of the Board of Trade.

Mr. Foot: Which one?

Mr. Barber: The present one.

Mr. Foot: I was trying to identify which particular quotation and which President of the Board of Trade the right hon. Gentleman was referring to. I am afraid I have not quite followed him. If in fact the present President of the Board of Trade said that we had not experience of nationalisation in manufacturing industry and that was why we could not judge on these matters, then, not for the first time, I must educate members of the Government as well as educating hon. Gentlemen on the other side.

Mr. Barber: What he said was that public management was suitable for public transport, gas, electricity, not manufacturing industries. Therefore, the job of nationalisation proper was more or less finished by 1951. This was in an article by the present President of the Board of Trade in a magazine called the Queen.

Mr. Foot: I remember the article very well. The President of the Board of Trade should be a bit more careful both where he writes and what he writes, I must say, but the right hon. Gentleman may remember that the article started the controversy we had in the Labour Party some years ago, when the proposition of the President of the Board of Trade on this matter was widely debated. Some of us in the Labour Party put a contrary view to his. Our view was accepted by the Labour Party, and the President of the Board of Trade has had to revise these views in response to the pressures from my hon. Friends and myself, exercised perfectly democratically. That is a process which we are continuing today.
I come back to the statement quoted from some previous President of the Board of Trade, or perhaps the present one, which the right hon. Gentleman adopted, so I hope that he will not disown it in another intervention.
We have had experience in the steel industry itself of public ownership. I know that some right hon. and hon. Gentlemen quote the balance sheets of Richard Thomas and Baldwins to prove, as they think, that they are right to criticise or condemn nationalisation on that account. The figures, facts and experience of Richard Thomas and Bald-wins prove the exact opposite. Anyone who looks at the accounts must divide them between the great new works at Newport and olders works such as those at Ebbw Vale, because there is a sharp distinction between the two.
In the case of Newport, it is the fact that there have been serious losses. No one can deny that. It is those losses which figure in the balance sheets and give such gratification to the arguments of right hon. and hon. Gentlemen opposite, supposedly. The fact is that Richard Thomas and Baldwins was the only steel company in the country prepare to go ahead on a big scale with the expansion of the steel industry in 1959 and 1960 when private enterprise would not undertake the job. That is the primary reason for the losses which have been sustained by that part of Richard Thomas and Baldwins.

Mr. J. H. Osborn: Would the hon. Gentleman not agree now that it is rather unfortunate that we had such a rapid

rate of expansion from 1959 onwards as a result of political pressures from the then Opposition, since that has led to the creation of so much surplus capacity at the moment?

Mr. Foot: There is a great deal in that, and if the advice of Richard Thomas and Baldwins had been accepted, the expansion would have been carried out in a different way. There would not have been expansion of both Colvilles and Newport at the same time. That was a decision taken, as a result of political pressure, by a Conservative Government who were presumably trying to exercise their views about the national interest, but were not very good at doing it.
No one can say that that is a charge against nationalisation. I hope that the hon. Member for Sheffield, Hallam (Mr. J. H. Osborn) will understand that that does not alter my argument that the serious losses at Newport shown in the balance sheets of Richard Thomas and Baldwins are due to the fact that the publicly-owned sector of the industry was prepared to undertake a vast expansion of the steel industry and create extra steel capacity when private enterprise was not prepared to embark upon the job.
Even though it is the case that there have been losses, the contribution of the great new steel works at Newport to the nation has been very considerable. The biggest exports of steel within the whole industry have come from Richard Thomas and Baldwins, from Llanwern. I appreciate that the steel sells at a lower price abroad, but that does not alter the fact that, had it not been for the expansion of the steel industry undertaken in those difficult days of 1959 and 1960 which the publicly-owned sector was prepared to undertake when private enterprise did not dare, the capacity would not have been in existence to enable such quantities to be sent abroad today, contributing greatly to the economy of the country and our general balance of payments position.
If anyone wants a further test to disprove the argument which has been advanced that we have no experience of nationalisation in the steel industry, I invite him to consider the other branch of Richard Thomas and Baldwins at Ebbw Vale. Ebbw Vale has been making


a profit ever since it was started by Sir William Firth in face of the pressures from most of the rest of the steel industry. If anyone goes to Ebbw Vale today, he will see a thriving industry making big profits and contributing greatly to exports at the same time. Indeed, Ebbw Vale is standing up to the difficulties in the industry probably better than any other steel works in the country today. If hon. Gentlemen doubt what I say and the claim which I make, I invite them to look at the verdict which was passed on Ebbw Vale by representatives of the Organising Committee who went there a few weeks ago.
Lord Melchett, a representative from Summers and other representatives of the Organising Committee went to Ebbw Vale to study the facts on the spot. When they had seen it with their own eyes and looked through the books, their verdict was that Ebbw Vale was doing extremely well, and it is not easy to say that about every steel firm in the country at the moment.
Therefore, I invite the right hon. Member for Altrincham and Sale to complete his education, once he has escaped from the rigours of the discussion of the Bill, to come to Ebbw Vale and see for himself how we are showing that steel can be produced with great efficiency and considerable profit, at the same time making a major contribution to our exports.
Those are the facts. I am not discussing some vague aspirations for the future but something which is happening today. It is partly because we know those facts that many of us have been so confident in urging that we should extend these principles to the rest of the country.
There are advantages over and above many of those which have been cited. It will be a very good thing for the industry if we can now not merely put an end to the uncertainty but to the feuds inside the industry. Anyone who studies its history will know that at the time that Sir William Firth started the great steel works at Ebbw Vale, it was recognised to be the most advanced works in the country. It was the pioneer in the pre-war process of rationalisation which other private enterprise firms were not prepared to embark upon on the scale

which they should have done. Sir William Firth was the pioneer in that campaign. What did he meet with from the rest of the industry? He was nearly squeezed out of existence, with the backing of the City.
The feuds have continued, and they have continued in this House. All these false allegations against Richard Thomas and Baldwins and the studied attempts of some right hon. and hon. Gentlemen to mislead the House and the country about this publicly-owned industry derive from campaigns which have been conducted by the private steel masters against the publicly-owned sector of the industry. Stewarts and Lloyds and the rest of them have conducted a constant vendetta to try and squeeze Richard Thomas and Baldwins out of existence and to squeeze Ebbw Vale out of existence. But they will not succeed. It is partly to end the feuds and secure an industry which serves the true national interest that this Measure is one not only that the Labour Party has favoured but which I believe the whole country will come to see as a great forward-looking Measure.
I welcome specially the Amendment which my right hon. Friend proposed dealing with workers' participation in the industry. In Ebbw Vale, we have had a very good record of workers' participation already. We have never had a strike at Ebbw Vale, though we have been near it on occasions. Strikes have been avoided by intelligent management such as we have there today. It is that intelligent, energetic management which helped to achieve the record steel figures which we have produced in Ebbw Vale all through these months of difficulty when some people in the industry were talking almost in terms of despair.
I do not think that anyone need talk in those terms. The steel industry is bound to face great difficulties, but they can be overcome. They are more likely to be overcome with the help of a coordinated plan and if the managements of all these concerns will explain and discuss with the people working in the industry what are the profoud changes which will have to take place. We all know that formidable difficulties have arisen in the Steel Company of Wales, and in other steel industries. For example, we know of the strike which is now going on at


Stewarts and Lloyds. There is a conflict of rights in these disputes, and there are powerful arguments on both sides. We know that the unions are engaged in these disputes, but anyone who tries to dismiss them as frivolous demarcation disputes is wrong.
We want to help them solve the difficulties, but we can do so only by the most spectacular increase in the methods of participation and discussion. This Measure looks forward to that, and I hope, therefore, now that it is being passed, we will have substantial support from all sections of the industry to make it succeed.
When I read the appointments to the Organising Committee made by my right hon. Friend, I was very critical of many of them, and I remain so, but I am very glad that he has placed representatives of the publicly-owned section of the industry on the Board. They are well represented there, and I am sure that my right hon. Friend will pursue that policy in the future.
I have many criticisms to make of the past records of those who have been prepared to serve on the Organising Committee. I would prefer to see on the boards of nationalised industries many more people who have a passionate determination, judged both by their past statements and by their present ones, to make public ownership succeed, because I think that in the end it is only by this method that we will make it succeed.
However, from all that I have seen, I think we have a chance now for a new beginning for the steel industry. I think that every section of it should assist in making this plan work. I think that the speech of the right hon. Member for Altrincham and Sale itself was an abandonment of the Opposition's argument. They had been reduced to a very small measure in what they have to say against this Bill. The whole argument about the future of the industry has reached a new point. The uncertainties have gone, and we can go forward to make this great industry one that serves the whole nation and provides a good livelihood for all the people who work in it.

5.52 p.m.

Mr. Nigel Birch: It would be churlish to grudge the hon.

Member for Ebbw Vale (Mr. Michael Foot) the celebration of his Roman triumph over the President of the Board of Trade, who no doubt will have to walk in chains for his sins. This is a great day for the hon. Gentleman, and I congratulate him on it, but I shall return to the figures which he gave for Richard Thomas and Baldwins. When is a loss a profit? It is a most interesting point.
I have only two points to make against the Bill. The first is the danger that is contingent, the other the danger that is certain.
I want to say a word supplementary to what my right hon. Friend the Member for Altrincham and Sale (Mr. Barber) said about the bearing of all this on the Common Market. I should have thought that this was a subject in which the Liberals might have been interested. We have only to look across the Gangway to see the Liberal benches crowded with their clean eager faces!

Hon. Members: Where are they?

Mr. Birch: The danger about our getting into the Common Market is this: as we know, there is surplus steel capacity in the world, and in the Common Market, and none of the industry in the Common Market is nationalised. I do not know how powerful the influence of the steel lobby may be in the Common Market. It may be fairly powerful, but they can hardly welcome a nationalised company coming in which has secured its assets at a fraction of their cost. They have seen that our nationalised industries have been run for years at a loss, and they may also worry lest we cheat.
Let us consider what happens with coal. It is protected by a heavy charge on oil, and it is also protected by the prevention of imports. The prevention of imports would be against the Common Market creed and whole arrangement. Whether they will trust us not to do such a thing, I do not know.
I think that it is very unwise to underestimate the damage that was done by the surcharge. When hon. Gentlemen opposite use the word "illegal", they use it as though it were the most horrible thing in the world, but we broke nine treaties when we put on the surcharge. It was absolutely illegal, and that has


not been forgotten, and I do not doubt that it will be a handicap to us in getting into the Common Market. This is an added reason for celebration by the hon. Member for Ebbw Vale.
The nationalisation of steel will make the management of our economy far more difficult than it is now. When hon. Gentlemen took office, they believed, or at any rate hoped, that the management of our economy was rather easier than it has turned out to be. It is not a very easy business.
Why should the nationalisation of steel make the management of our economy more difficult? It is mainly because of the enormous increase in Government debt which results, and compensation here is relatively a flea bite. The electricity industry, the toughest monopoly of the lot, is asked by the Government to charge prices which enable it to finance quite a lot of its capital expenditure. The compensation paid in respect of this industry was £342 million, but the total funded debt to the United Kingdom is now £3,700 million. Compensation for the coal industry was £388 million. We know that £415 million has now been written off, so the Coal Board got the whole industry for less than nothing, but the funded debt is £575 million. If we add that to the amount written off, it means a debt of nearly £1,000 million outstanding. I think that the humanity of the House will permit me to draw a veil over what has happened about railway finance. Thousands of millions of £s have been written off, and the debt there is stupendous.
It is not so much a question of the nationalised industries losing money, though of course they often do so. It is a question of now we are going to finance them. I think everyone admits that if a nationalised industry loses money the unfortunate taxpayers have the privilege of paying for it. A lot of people say that that is all right, but surely if we are using money for capital investment in the nationalised industries it is appropriate to borrow the whole of that money so that it need therefore not really be a burden on the taxpayer at all?
But I do not think that it works out that way. This year capital expenditure on the nationalised industries amounts

to, I think, £765 million, and in nearly every mini Budget which we have had from the Chancellor of the Exchequer he has tried to cut down capital expenditure by the nationalised industries. The reason is simply that one cannot borrow that kind of money. It would not be inflationary if we can get genuine savers to buy that amount of gilt-edged securities.
That was the great trouble in France. They had eight devaluations in France before de Gaulle got properly in the saddle, and as M. Rueff pointed out, one of the difficulties was the impasse, that is to say, they were borrowing for the nationalised industries, but could not borrow from genuine lenders. The money therefore had to be raised in taxation, and they did not raise enough.
In this country we nearly always have had to try to raise money by taxation for the capital expenditure of the nationalised industries. We have generally not raised enough, because the burden has been so heavy, so we have had the extra taxation, and we have had inflation, and I think that this Measure will add very largely to that difficulty.
Let us now consider the steel industry. Even the Minister is not particularly hopeful about what will happen. We had a remarkable discourse from the hon. Member for Ebbw Vale about Richard Thomas and Baldwins, but there were remarkable omissions in the Minister's speech. He gave us the earnings of many steel companies, but he did not mention Richard Thomas and Baldwins. I wonder why? I think I can give the reason. In the last four years, losses before taxation by Richard Thomas and Baldwins, amounted to £30 million, which by any standards is quite a lot. Those were the lush years, but the company lost 30 million, and would have lost more last year if £39 million of its debt had not been turned into equity, which was held by I.S.H.R.A. That is a genteel way of writing off capital losses.
Very prudently the Minister did not answer when I asked him if he had any idea when he would build his great plants, or at what annual cost.

Mr. Michael Foot: Will the right hon. Gentleman tell us whether he agrees with what I said, namely, that the reason for the losses was that the steel works at


Newport went ahead whereas the rest of the industry refused to have anything to do with them, and that throughout the whole of this period a steady profit has been made at the other parts of the works? That seems to disprove the right hon. Gentleman's general charge against the company.

Mr. Birch: He is not correct about nobody else being willing to do it. I believe that I was at the Treasury when the original argument arose about the fourth strip mill. Many people were willing to do it. It was put in South Wales for social reasons—to please the hon. Gentleman's constituents. I hope they are grateful.
The Minister did not answer my question. I do not think that he has the faintest idea what the answer is, but if we are going to enter into a large scheme for scrapping the old mills—which we will have to do—and concentrate on a few enormous plants, the capital expenditure will be astronomical, and will all go on the Budget. This year the Chancellor of the Exchequer is in desperate straits, and will be next year and the year after that, because expenditure is rising rapidly and his revenue is not, and because production and growth are not going ahead. The business of the public sector sucking all the money out will make his task far more difficult.
It is often said that people are bored by the controversy about steel, and that is probably correct. We cannot go on for 21 years arguing about it without people getting bored. But they will not be bored by the results. They will be agonised. It will make the position of the Treasury even more difficult than it is now; indeed, it will make it almost impossible. Why have they done it—to please the Playboys' Bunny Club below the Gangway.

6.04 p.m.

Mr. R. E. Winterbottom: The right hon. Gentleman was dealing largely with the finance of the steel companies. I suggest that that problem would have been there whether or not we had had a nationalisation Bill. The British steel industry has already been the subject of a review under the very able chairmanship of Sir Henry Benson. It has published its First Report. It has made suggestions about the reorganisation of the industry, and the Report

shows that the problem of finance for the reorganisation of the industry would be there whether or not there was nationalisation.
Some of us who have close links with the industry looked forward to the Second Report from Sir Henry Benson, which we hoped would deal with the financial aspects of the proposal to reorganise the industry, as outlined in the First Report, for we would then have had some idea of the point of view of those at present in the industry as to what it would cost to finance its reorganisation. I have been surprised at the tone of the discussion up to now. I thought that the tumult and the shouting would have died, but seemingly we are still debating whether or not to nationalise the industry. The speech made by the right hon. Member for Altrincham and Sale (Mr. Barber) could have been better made when the Bill was orginally introduced rather than now, when we are almost at the end of a very controversial discussion.

Mr. Marsh: The right hon. Gentleman made that speech on both occasions.

Mr. Winterbottom: The right hon. Gentleman is still living in the past. He has not seen the wind of change and has not had given to him the advice which was given to me when I was sailing before the mast, namely, "Never throw your slops to windward". It is coming back to him at this stage because he has to face the problem of what to do from now on rather than what has been done up to now.
I think that I should deal with the problem of what to do from now on, because I believe that I was the oldest Member on our side of the Committee, with possibly the longest service in the House. I should be failing in my duty and should not be satisfying my inward self if I did not pay tribute to the Minister who has succeeded in piloting the Bill through. He deserves great praise, and I consider that he has considerably enhanced his reputation. Sometimes he may have seemed a little hesitant, but he is a young man, with his first major Bill. Sometimes he may have seemed to the Opposition somewhat unyielding, but it has been proved that he was right in what he said. Sometimes he may have seemed rather sphinxlike, but nobody


who had been in our debates in Committee could deny that he has brought to his job great skill, capacity and sincerity. I compliment him.
I want to deal with the problem of where we shall go from here. After the Bill becomes law the British steel industry will be divided into two sectors—the private and the public. In every argument today I detected a desire to keep the two sectors separate and distinct. There was much talk in Committee about competition between the two sectors, and I have no doubt that before this debate is over there will be more talk about such competition. But I am not concerned too much about that problem; I am concerned, from now on, with the possibility of co-operation between the two sectors.
I want to refer to what my hon. Friend the Member for Ebbw Vale (Mr. Michael Foot) said, namely, that it is time the feuding in the steel industry ceased. The public and private sectors of the British steel industry must face the future and work to improve the economy. That will call for co-operation between the two and mean that if there are difficulties in one sector, the other must come to its assistance. If the industry as a whole—both sectors of it—is to face the task that lies ahead, there must be co-operation, perhaps in terms of consortia.
When one considers the state of the economy and what needs to be done to develop our export trade, one must wonder how that is to be done and which industries can make the biggest contribution. The latest export figures are encouraging, but more must be done. A tremendous proportion of our expels comes from the engineering industry. This leads me to the conclusion that if steel is to play its proper part in the export drive and is to compete with the industries of other countries, we must think in terms of steel as a whole— not just steel as steel but steel as the raw material of the plant, equipment and machinery that we can export.
It does not matter whether Richard Thomas and Baldwins increases its sales of steel by 100 per cent. Such an increase would, of course, be helpful to our export drive. More important would be for those additional sales to be made

up of manufactured goods, with the "know-how" of British engineering behind them.
When thinking of what the British steel industry must do in future—and throughout my remarks I am referring not to one sector of it but to the private and public sectors alike—we should not confine our thoughts to a number of small steps that might be taken to improve the industry. We may need to take one enormous step forward, and I suggest that one of the biggest strides would be to convert more of the steel into the plant, equipment and machinery that is urgently needed throughout the world. The capacity of steel may exceed demand, but the convertibility of steel—into plant and machinery—will not exceed demand for decades to come.
When I advocate the public and private sectors of the steel industry cooperating, I do so in the knowledge that such co-operation is possible. I recall that without that co-operation Britain might never have achieved one of the greatest export orders executed by our steel industry. Some years ago 13 British steel firms won a contract to build a steel factory at Durgapur in India. Worth £120 million, the order could be executed only by those 13 firms co-operating in a consortium.
That illustrates that co-operation is not only possible but vital. Some of those 13 firms will be nationalised while others will remain in private hands. They cooperated once and co-operation will be needed in the future. The old antagonisms, which arise as a result of people having a false conception of competition, must disappear. As we finalise this act of nationalisation, I hope that it will be possible—indeed, it is vital that this should happen—that the private and public sectors will co-operate to overcome the difficulties that lie ahead and will concentrate on exporting plant, equipment and machinery to satisfy the needs of the world and make our export drive succeed.
The facts must be faced. Unless the steel industry is subject to at least the degree of nationalisation envisaged by the Bill, no progress is possible. I therefore question whether the industry could be reorganised in the terms of the Benson Report. I do not believe that sufficient private capital could be found to enable that reorganisation to take place, even


though it must be a reorganisation spread over many years. Without a degree of nationalisation, the industry could not possibly face the challenges that come from overseas steel producers and face not only the competition that exists today but the competition that will grow through the 'seventies.
The British steel industry is not the only steel industry in an unhappy position. The German and French industries are no better off. The French industry has been going though a process of reorganisation such as that envisaged in the Benson Report for the British industry. A certain amount of reorganisation has gone on in that country, but the French industry has arrived at a point when it can proceed no further because of the lack of capital. Because of this, it has had to go cap in hand to the French Government for assistance.
Many people have said that the degree of nationalisation which is taking place in Britain will act as a barrier to our entering the Common Market. I urge them to study what has been, and is, happening in some of the countries of the Six. The French Government, for example, is heavily subsidising that country's steel industry—subsidising it under the sort of conditions that gives one the impression that the subsidy is almost a direct contribution to the industry's reorganisation.
Under private enterprise the British steel industry could not possibly find the necessary money to finance the sort of reorganisation envisaged in the Benson Report. Although I have no justification for saying this, I believe that the second report of the Benson Committee has been deliberately delayed so that these debates could be concluded before it was issued. I regret that—if I am right in believing that it has been held up—because I would have liked to have seen the final conclusions of the Benson Committee, which would have given us an idea of the amount of capital that will be needed to reorganise the industry.
We must accept that the industry must be nationalised if it is to be efficient. I hope that there will be no more talk of inefficiency in the days to come. The private and public sectors must co-operate, there must be harmony in the industry and the industry must be reorganised in

such a way that it is enabled to make a bigger contribution to our export drive.
Considering the other industries on which many people pin their hopes for greater exports—plastics, electronics, chemicals and so on—I still believe that, somehow or other, the British steel industry, if reorganised correctly, could make an immediate impact on our export drive. So large an industry is it that it could, if given a chance, colossally boost our exports and satisfy a great deal of the steel needs of the world.

6.22 p.m.

Mr. Nicholas Ridley: It is always a pleasure to speak following the hon. Member for Sheffield, Brightside (Mr. Winterbottom) to whom we were endeared during the passage of the Bill in Committee. I congratulate him on being the first hon. Member to claim to have actually seen the wind of change. It must have been a unique experience.
I pay tribute to my right hon. Friend the Member for Altrincham and Sale (Mr. Barber). Never has an opposition to a Bill so well and truly led and never has so much energy, intelligent comment and leadership been put into the Parliamentary work of exposing the weaknesses and, at the same time, trying to improve a Measure of this importance.
I also pay tribute to the Minister. He showed throughout these proceedings—which, at times, were remarkably trying and difficult for him—very good temper and patience and a readiness to listen, consider and ponder the points of views of hon. Members, although he did not always agree with them. We sincerely thank him for his efforts. At the same time, I must criticise him in one respect. I hope that when he is out-argued and finds the discussion running against him, he will cease to try to defend himself by saying that his opponents are knocking sterling, being unfair to those who work in the nationalised industries, knocking our chances of getting into Europe or knocking the national interest. These have not been the Minister's strongest arguments. His comments must be based on logic and fact.
In Committee and on Report the justification for the Bill was not substantiated. The nepotistic argument was never developed because it was clearly untrue.


The technical inefficiency argument has never been developed because it was clearly more suitable for the hustings than for the Committee Room. The shortage of investment argument, which the hon. Member for Brightside has just used, did not prove on examination to he true because, apart from a few strip mills, the steel industry has been able to find the bulk of its requirements and, I believe, but for nationalisation would have been able to do the same in the future.
The rationalisation argument did not stand up to examination because rationalisation is taking place in Germany, Japan, France and America, where, of course, the steel industry is under private control. It is only because the need for rationalisation is very recent due to technical change that it has become an issue at all. Hon. Members opposite could not have been more fortunate in having the argument of the need for rationalisation landed in their laps just when it happened that for doctrinaire political reasons they wished to nationalise the industry.
We were told that there was no competition in the steel industry and that this was another justification for nationalisation. The Government, however, are abolishing any vestige of competition which will be left by making this monolithic bloc. They told us that there was too great a profit for private interests in the profits of the steel industry. Now, we hear the Minister complaining throughout his speech that the steel companies are not making enough profit. Which of these does the Minister want? Does he want the private companies to make big profits or small profits? He must make up his mind about this.
Some new fears have emerged about the Bill. My right hon. Friend the Member for Flint, West (Mr. Birch) certainly advanced one of the most powerful arguments why it is a dangerous Bill to pass at this time. I will not go over his remarks on Europe because I am sure that he is right; but his remarks about the effect of this large amount of compensation stock and of new capital for the industry upon the finances of the country in future years were indeed relevant.
Perhaps I might briefly remind the House that during the period since the war we have paid revenue subsidies to nationalised industries of £800 million and we have written off £1,717 worth of capital, making a total loss to the taxpayer of £2,517 million. Those figures are taken from Parliamentary Written Answers. And yet the direct tax paid by the nationalised industries hitherto has been only £192 million. Therefore, about £2,300 million has been taken out of the taxpayers from the private sector and put into the public sector. This illustrates the degree of burden which nationalisation puts upon the backs of those who pay tax.
I think it is generally accepted that the nationalised steel industry will pay little or no tax and yet its investment needs will run over the years into many thousands of millions of £s. There will be £500-odd million to start with for compensation stock this summer. I believe that the further burden which this will place on taxpayers will cause the rest of private industry to have to pay more and more tax to support the ever greater State animal which the Minister is producing.
The Minister reminds me of Jack and the Beanstalk. He has planted today a seed which will grow and grow to a proportion which we do not quite know.
What have we created in the Bill? What is the organisation which will be set up after the Bill leaves this House? The justification has so often been that we must bring the steel industry into public control. When we consider it, however, we are loosing an enormous economic elephant over which nobody will have any control. It is extraordinary how little control we shall have over rationalisation. These are decisions for the Organising Committee. Works can be closed and new works can be built, and neither Government nor Parliament can affect them.
What about prices? It has not been demonstrated that the Government have any influence over the prices which nationalised industries have charged in the past. Quite the reverse. What about wages. There has been no indication that the wages of nationalised industries are more effectively controlled than wages


in the private sector. With their open-ended financial ability, nationalised industries have been able to pay wages which nave gone beyond norms and incomes policies of Governments of both colours. The nationalised industries do not respond to deflation, to high Bank Rate, or to all the traditional instruments for controlling the economy. Steel will be no exception.
This enormous capital investment which will be necessary will not be influenced by the forces of the market. In bad times or good, the Steel Corporation will draw up its budget and the Chief Secretary will have precious little influence. He will not know what is going on. There will be no means by which this enormous investment in steel can be matched in relation to investment in other branches of the economy. There will be no real control. When one thinks that the nationalised industries are responsible for one-tenth of the productive resources of the country and that they consume one-quarter of the industrial investment, one realises how privileged they have been in obtaining the savings of the nation.
I believe that in efficiency we are creating something over which we will have less control and not more. The steel industry varies from being 10 or 20 per cent. overmanned to being, per haps, in some sectors as much as 50 or 80 per cent. overmanned when it is compared with similar plants in Europe and America. It is a devilishly difficult job to find a way of making acceptable efficient working practices and to get a far higher degree of manning efficiency in the industry. And yet by nationalising steel we will make it harder—not easier—to eliminate these practices because the pressure on margins and the financial pressure upon the managers will be less keen.
We have also lost control over much of the industry's public performance—such matters, for example, as compulsory purchase of land. The Building Control Act is not to apply to it. We have in the Bill all sorts of safeguards which make life more easy and more favourable for the Coporation. All this adds up to providing less control, and not more control, over this enormous slice of economic power.
This House must devise disciplines and structures to redress the balance between the private and public sectors. The control mechanisms in the Bill are inadequate. Demands for capital from the nationalised industries should be made to compete with and sometimes to suffer at the hands of the demands for capital of other industries. We cannot ignore the fact that one-tenth of the productive capacity in public hands is already consuming one-quarter of the capital. When this great Leviathan is launched, it will probably make that disparity increase.
We must somehow bring real competition from outside to bear on the steel industry. If we fail—and I hope that we do not—to enter the Coal and Steel Community, it will be necessary somehow to succeed in cutting the tariff so that this great steel industry comes under direct competition from abroad to keep it in tiptop form.
We must think up a provision to stop and to penalise the Corporation or the companies if they drift into peristent financial loss over the years. There is no easy way to force efficiency, but somehow we must find ways of putting management on its mettle so that the performance of the industry will be better even than private enterprise has been.
It is on these issues that so many of our debates have centred in Committee and on Report. The Chief Secretary would, I think, agree that neither this side of the House nor the Socialist Party has been able to put forward remedies that will make a nationalised industry able to stand on its own feet and to compete on equal terms with privately-owned industry. It may be impossible to devise such disciplines, but now that the Government are extending the public sector we must turn our attention much more seriously to this whole problem. It may not be possible, but we can take no pride or pleasure in the degree of success which we have had in the Bill which is now before us.
I would like to make one point on labour relations. The hon. Member for Ebbw Vale (Mr. Michael Foot) and others seem to be under the impression that the Bill contains a decisive move towards worker control or worker participation in running the industry. I do not believe that that is true, nor do I imagine that that is what the Minister thinks.
The Minister has several times said that managers must manage, and this is the way in which the industrial relations in the Bill are laid out: that the managers should have responsibility for managing at all levels. On the other hand, there is to be the maximum amount of consultation between both sides and this is absolutely desirable. Consultation, however, is not the same thing as participation. It would not be right to let the impression go out from this House that the Iron and Steel Rill contains a move towards worker participation or worker control. What I pay tribute to is that there is a definite attempt on the part of the Government to set up consultative procedures and negotiating machinery for the steel industry which will be an improvement on previous practice.
The future administrative and technical shape of this vast economic animal which the Government are today creating is to be dropped gently but firmly into the lap of the noble Lord, Lord Melchett, that lapsed Tory peer whom the Government have selected to put right all the problems of this industry. He has no direct experience of steel, nor really any experience of industry directly, and very little experience of politics. There was, I suppose, a pious hope in the minds of the Government that as his grandfather reorganised I.C.I., on the hereditary principle he will have the same ability to reorganise a great industry himself. That the hereditary principle should be called in aid is extraordinary.
It is incredible the way the Government have defended Lord Melchett's unfettered right to take all major decisions about how the steel industry is to be run. Whenever the House has pressed for details of the pricing policy, the grouping policy, the structure of management, details of rationalisation or even an indication of how the Minister's mind was working, we have been told that this was a matter for the Organising Committee and for Lord Melchett.
Nothing at all has been worked out by the party opposite while they were in Opposition. The civil servants produced for them the standard Bill for nationalising steel, the skeleton upon which they were unable to put any new clothes or any new flesh. This afternoon, therefore, the steel industry passes out of the con-

trol of the forces of the market and the disciplines of competition. In my opinion, it passes out of the control of the House of Commons. It passes even out of the control of the Government, a large rogue elephant on the loose in our economy and trampling down the productive industries in the private sector which remain.
There is a strong desire among many people in the steel industry, and elsewhere, to take steel out of politics. But who brought it in? The party opposite. There was an uneasy compromise—I admit that it was uneasy, but at least it was a compromise—in the 1953 Act. We returned steel to private enterprise, but we kept some degree of public supervision so that the party opposite could possibly persuade their doctrinaire wing to accept that despite this dispute between us, we had left some degree of public control.
By this Bill the Labour Party guarantees that steel will remain in politics. I believe they are bringing many other industries into politics by their desire to control, to fix prices and wages, and to have participation by the Government. As they bring more and more into the maw of politics, people will get more fed up with political interference in industry. The steel industry has been made a guinea pig, the political football kicked about between the two parties. This is not for any reason than that both parties honestly believe that their own system of running industry, by free enterprise or nationalisation, is the only way in which we can cure the economic ills of the country and our known sloppiness and inefficiency as an industrial nation.
Because I believe that what the Government are doing for the steel industry will permanently wreck our chances of achieving first-rate technical and managerial efficiency in future, I believe no sacrifice is too great to make sure that this industry is eventually returned to private ownership.

6.42 p.m.

Mr. Brian O'Malley: I begin by congratulating the Government on getting this Measure through to its Third Reading. Many of us in the Labour movement have waited a long time for this Bill. It has been in the party programme throughout the postwar period, in the years of Opposition,


in 1955, 1959, 1964 and 1966. The workers in the steel industry have looked forward to the introduction and the final completion of this Bill for a very long time, indeed.
There were times during the 1964 Parliament, when we had a very small majority and when there were all kinds of interesting twists and turns in the arguments about nationalising the industry, when I began to wonder whether we would ever reach this happy stage. I was a Whip in those days, but even Whips have opinions on these matters; although they cannot offer them publicly they can still think them privately. I am very pleased that the end of this part of the story of the history of the industry has been reached and that we have reached the Third Reading tonight.
I congratulate the Minister very sincerely on piloting this Bill through its various long stages in the House of Commons. Whatever hon. Members opposite might say about the interest in the subject of steel nationalisation in the country as a whole, one thing is certain. It is that the workers in the steel industry, the men who are dependent on that industry for their livelihood and who know something about it, believe that steel nationalisation is in their interests. It is no good the hon. Member for Sheffield, Hallam (Mr. J. H. Osborn) shaking his head. As we all know, he has long and intimate connections with the steel industry which we all respect, but if he went into a working class steel constituency, in Sheffield or Rotherham, he knows that he would not be returned to this House in a thousand years.
He has to go to the outskirts of Sheffield which I know very well. I am not being derogatory about his constituency, but he would not get in for a South Yorkshire steel constituency where the men who work on the shop floor live. These men believe that nationalisation is for their benefit because they do not trust the present owners of the steel industry. They have goon reasons for not trusting them. That is not to say that there are not very often good labour relations within various parts of the industry, but that they do not trust the motives behind the actions which the industry has taken in the past. I do not blame them; I agree with them.
The right hon. Member for Altrincham and Sale (Mr. Barber) used to be at least within some distance of a steel constituency, my constituency, when he was the hon. Member for Doncaster. He put forward a very weak argument this afternoon. Steel workers from my constituency went in busloads to Doncaster to get him out at the 1964 General Election because of his views about the industry. He said today that this was not the right time to nationalise the steel industry. He said that it was affecting overseas confidence. I should not have thought that the one factor above all which had affected overseas confidence in this country was that so much of the industrial infrastructure of the industry was suitable for the 1930s, but not for the 1960s and into the 1970s.
We are told that this Bill will make it more difficult to get into Europe. I echo what my hon. Friend the Member for Ebbw Vale (Mr. Michael Foot) said. If it meant that by going into Europe the British people, through this House of Commons, could not decide the future pattern of organisation within British industry, I should have very serious reservations about our going into Europe. There is another curious side to this argument. What the right hon. Member opposite who blithely put forward arguments about entering the E.E.C. seemed to suggest was that only by keeping the British steel industry in its weak fragmented form could we get into Europe and that if we had a strong steel industry the Europeans would not want us.
I would not want to think that this country was to go into any organisation on the basis of industrial weakness. I should have thought that we should want to operate from a position of industrial strength. I thought that hon. Members opposite, particularly the right hon. Member who opened for the Opposition, put a weak case. It is notable that their case has changed in the last 18 months—at least I thought it had until I heard the hon. Member for Cirencester and Tewkesbury (Mr. Ridley) this afternoon. He suggested that one argument for nationalisation of the steel industry was that we want to rationalise the industry and that this was no longer an important argument, but there was no indication that the steel industry was showing any intention of carrying out the necessary rationalisation, such as has been going


on in Europe, until the industry knew that a nationalisation Bill was to be introduced.
The Minister dealt with that adequately. The hon. Member said that investment had been adequate under private ownership. It had not. Why did his Government put money into Richard Thomas and Baldwins and Colvilles? It was precisely because the private sector was unable or unwilling—or both—to carry out the kind of investment programme needed to increase the capacity of the industry. I suppose that hon. Members opposite could get away with talk about competition on Second Reading but the hon. Member has been through the long days and nights of the Standing Committee sittings and he knows the story about the state of competition in the British industry in the post-war period.
Before leaving the hon. Member for Cirencester and Tewkesbury, I must say two things to him. He made an attack on Lord Melchett, which I thought was a personal one. The hon. Member was sneering about lapsed Tory peers and about the hereditary principle and what Lord Melchett's grandfather did. I regret that, and I think the hon. Member will regret it when he thinks about it. Some of us on this side of the House have attacked other individuals on the Organising Committee. It is well known that I made an attack on Mr. Niall Macdiarmid, but never personally as an individual. I attacked the kind of views he had expressed for many years in opposition to nationalisation.
The hon. Gentleman said that it was the Labour Party which had brought the industry into politics. Of course we did. It is entirely within the scope of politics to be discussing the great industrial and economic issues of the day. What crossed my mind when I listened to the hon. Gentleman was the story of the great landed aristocrat and coal owner at the time of the legislation for coal inspectors in the 19th century who threatened to whip any inspectors off his land who went to look at his coal mines. I sometimes think that the hon. Gentleman is way back in the 19th century in what he thinks should be the scope and range of political activity. Times have changed since then. The scope and range of

successive Governments has widened considerably.

Mr. Paul Hawkins: The hon. Gentleman is adducing the argument that it has always been proper for the industry to be brought within the range of politics. Does he suggest also, as many of his hon. Friends have, that now is the time when it should no longer be legitimate political interest?

Mr. O'Malley: I do not suggest anything of the kind. Indeed, there are provisions in the Bill giving a degree of supervision to the Minister and to Parliament. Knowing hon. Members opposite and their attitudes, I have no doubt that it will not be taken out of politics in the next few years or, indeed, in the foreseeable future.
The Tory Party's opposition to the Bill has considerably changed over the last 18 months or two years. When they were in government and during the 1964 General Election campaign, both the British Iron and Steel Federation and the Conservative Party defended the present set up in the privately-owned sector and spoke with glowing approval of its policies and records. It was only when a Labour Government were returned—when the crunch came—that the Tory Party's whole attitude changed. The right hon. Member for Enfield, West (Mr. Iain Macleod), in the first debate on steel after the 1964 Parliament met, admitted, as no Conservative spokesman had admitted before, that everything was not well within the British steel industry. The argument now is that there is considerable need for a radical reorganisation of the industry and rationalisation, that the 1953 Act was wildly and grossly defective. The Opposition admit it now, but they did not admit it until recently.
This changed attitude would have been more impressive if the timing of the conversion had been different. It was noticeable that the British Iron and Steel Federation's proposals for the reorganisation of the industry came only in May and June of 1966, and the Benson Report did not reach many hon. Members in time for the Second Reading debate. The Report was published on the very eve of the Second Reading debate. The Opposition's case would have been more impressive if some of the necessary amalgamations and rationalisation had taken place long before 1964, when the writing was on the wall and when


the Europeans were already beginning to do something about this.
The truth is that the Opposition have lost even the confidence of the Federation. There is a wide gulf of opinion on a number of issues between the Federation and the industry and what hon. Members opposite have been saying. I can understand why. It is known in some quarters what some senior members of the Federation thought about the standard of the Opposition Front Bench speeches on Second Reading, particularly the winding-up speech.
The right hon. Member for Altrincham and Sale let the cat out of the bag in Standing Committee. I asked him:
Is it not true that all hon. Members opposite on this Committee had at least one initial briefing over at Steel House a few days before this Bill.
I meant a few days before the Committee stage began, because that is when the meeting took place. The right hon. Member for Altricham and Sale said:
Before we came on to the Committee we wanted to know what it was all about"— [OFFICIAL REPORT, Standing Committee D, 13th December. 1966; c. 2277.]
It is a pity that they did not try to find what it was all about when they were in government so that they could deal with the problems that existed in the industry over those years when the Labour Party was complaining.
We had an argument on the question of vesting day only this week in the House. Hon. Members opposite, the Front Bench included, said that, because of the negotiations with Europe, we should postpone vesting day. Hon. Members opposite are not even representing the views of the Federation or of its senior members. In the annual statement of the South Durham Steel and Iron Company, the Chairman, the Hon. E. E Ward, said:
Any last-minute delay in the date of vesting would not help us.
This was on Wednesday, 25th January. Only two days previously hon. Members opposite had said they thought vesting day should be put off.
Another example of this has been the way in which hon. Members opposite, including the Opposition Front Bench, have been insisting that we should adopt an E.C.S.C.-type pricing system. When I and some of my hon. Friends suggested to the right hon. Gentleman the Member

for Altrincham and Sale that there were some objections to that—first, that it did not work, and, secondly, that our steel industry, whatever it thought 18 months ago, did not want it—heads were shaken. In the annual statement of United Steel Companies Ltd., published in The Times on Monday, 23rd January —only this week—the Chairman, Mr. A. J. Peech, said this:
In Europe the steelmakers have been unwise enough to match the prices of cheap imported steel with the result that the pricing system on the Continent is at the moment in a state of collapse, although discussions are proceeding in an attempt to restore the position.
We told hon. Members opposite this in Committee, but they would not accept it.
One very unfortunate aspect of the attack made by hon. Members opposite on the Bill is this. Over the years we have always had attacks on Richard Thomas and Baldwins. I thought we had got over that, but like a political pterodactyl, the right hon. Member for Flint, West (Mr. Birch) came back with those kind of sneers at Richard Thomas and Baldwins. My hon. Friend the Member for Ebbw Vale answered him fully and effectively. At least Richard Thomas and Baldwins has paid in full the interest on the £70 million of the taxpayers' money it received.
But the same situation does not apply to Colvilles. Last time I examined the accounts, I found that on the loan to Colvilles there was £5 million in unpaid interest. The right hon. Gentleman knows the situation very well with regard to the strip plant at Richard Thomas and Baldwins. He knows the difficulty of running in a plant like that, particularly in the economic circumstances of the last few years. Although he knows something about the steel industry, he did not mention Colvilles which, with a strip mill that is half the size of that at Richard Thomas and Baldwins, made a loss of £4·7 million in 1963. I am not attacking Colvilles but merely noticing the situation. One appreciates the difficulties that Colvilles have had.
But it is not only Colvilles which has the peculiar difficulties which the hon. Member for Glasgow, Cathcart (Mr. Edward M. Taylor) and I spoke about the other night. Last year, John Summers'


new plant lost £1·37 million. The new plant at Park Gate, near my constituency, has lost a considerable amount of money. I noted that the right hon. Member for Flint, West did not refer to the fact that Richard Thomas and Baldwin has an export record second to none. It has exported about 40 per cent. of its production in recent years.
We are giving its Third Reading to the Bill against a background of world surplus and when the other European nations are drastically reorganising the shape and pattern of their steel industries. With this background in mind, the Minister and the Corporation should make the right decisions. In this context I want to refer to the composition of the Corporation. I shall not go over old ground but present some new points.
We have said before that we must get the right men for the job and the right balance on the Corporation because these are the people who will take crucial decisions affecting the whole future and prosperity of the industry and employment within it. I take this first opportunity that I have had publicly to say to the Minister that I am very pleased that an experienced trade unionist from my constitutency, Mr. Sidney Harris, whom I know very well, has been appointed to the Organising Committee. With his experience and point of view he can play a very useful and important part on the Committee.
But, having said that, I want to raise one further matter about the composition of the Corporation. It seems to me that the Organising Committee, from which, one assumes, the Corporation will at least in part be chosen, is not yet sufficiently broadly based. The present members represent—and I do not use that word in its narrow sense—tube and sheet interests in the main. The other steel maker on the board is not greatly involved as a major part of his company's interests are outside the scope of the Bill.
I hope that my right hon. Friend will be appointing people with experience in bulk steel production from large plants but, more than that, since we are talking about reorganisation, which is more likely, perhaps, to affect some at least of the smaller units, there should be on the

Corporation, in the early years at any rate, a member or members with experience of the operation and administration of smaller companies. The financial, operational and commercial problems of the smaller companies are different from those of the larger. There are obviously wide differences between these various sections and if the Minister were to appoint members of the Corporation with experience of the smaller companies he would be getting a wealth of experience on the Committee which it would otherwise lack.
I want to refer to the pricing system for which the Corporation will be responsible. The Opposition have said that we should have a system like the E.C.S.C. pricing system. I believe that the danger in that system, and its loophole, is the alignment one can take as a result of the intervention of a third party. I am not antagonistic to this system, but although it worked well until 1961, when we got into a buyers' market, it is obvious that, since we are in such a market, the system has not worked well. The Corporation would be ill-advised to adopt that system which, I believe, will probably be radically overhauled within the Community itself because what is necessary, as the Iron and Steel Board has stressed, is that the industry should be able to have internal prices which will secure sufficient capital for a proportion of its capital investment.
My last point concerns the question of the reorganisation of the industry on which the Corporation has powers in Clause 4. It has been suggested that the Corporation is likely to recommend the reorganisation of the steel industry in either regional or product groups. I believe that regional groupings are the most satisfactory way. Perhaps the Minister will comment on the amalgamation to which he has agreed between Dorman Long, South Durham and Stewarts and Lloyds. If one looks at this in terms of regional groupings, one finds that Consett, a firm on the North-East Coast, is excluded. The amalgamation does not conform to either a regional or a product basis and if it is carried through it must affect all future groupings.
I believe that the purpose of the amalgamation—and one understands that it was urgent and important—could have


been achieved by a straightforward commercial arrangement without prejudice to the final outcome. As a result of the amalgamation, the group now has plants in the North-East, Scotland, Birmingham and Corby. Surely this is administratively difficult to control and will make the situation more difficult in future. It seems to me that a consortium or amalgamation of Dorman Long, Consett, South Durham and Skinningrove would have been a better arrangement.
I echo what my right hon. Friend said —that nationalisation of itself does not solve any of the major problems of the steel industry. But it makes a solution of them possible to a degree not possible under private ownership. We can speedily get the rationalisation and reorganisation that is necessary. We can get a more sophisticated stocking policy which, as my hon. Friend the Member for Penistone (Mr. Mendelson) said in Committee, has been one of the greatest difficulties confronting the industry. I believe that we shall get co-ordinated rolling programmes, just as they are getting them on the Continent. I believe that, with new technologies, such as the spray steel making process, which has immense significance under public ownership we can develop a steel industry which is the envy of Europe.
I believe that the kind of organisation we are creating under the Corporation means a prosperous steel industry which can give the people working in it a secure future, even though difficulties not only loom on the horizon but are with us at present. This Bill and the organisation created by it will produce a steel industry which will be able to compete with any industry in the world.

7.10 p.m.

Mr. John H. Osborn: This debate and those we have had over the last few years on the steel industry have been of considerable personal significance to me because I have been connected with the industry indirectly for many years and directly for 20 years, and during that time the industry has been in the cockpit of politics. Many times I have regretted that state of affairs. This debate has confirmed my view that the steel industry is now locked in the cockpit. The only difference is that it is locked in with its hands off the steering wheel and unable to reach the

brake or the accelerator while someone else will be taking over control—the State.
The hon. Member for Rotherham (Mr. O'Malley) referred to the attitude of the workers. He said they would welcome this Bill. I am certain that he speaks for many of the leaders on the shop floor, but I doubt whether he can say that he speaks for the rank and file, although they are strong Labour Party supporters. Many people will weigh up what has happened in the House since March and reach their own conclusions.
Managements, and certainly the President of the Iron and Steel Federation, have repeated recently that the industry must accept the decisions of an elected Parliament and operate the industry under the new legislation which will control it. This reflects my own attitude of last July namely that, the Second Reading having been agreed to, those who had been responsible for the destiny of the industry should now be prepared to operate it under the new system irrespective of whether they thought it the best system or not.
I believe that the electorate has not fully realised even now the significance of what will happen tonight. Many have read our debates and have still asked me, "Will steel really be nationalised?" I have had to reply, "Yes". According to a Gallup Poll, 71 per cent. of the public were against nationalisation of steel. But now there is to be a sophisticated takeover by the State and central direction will be in the hands of the Government. We have debated today the meaning of the penalty of accountability to Parliament.
I will touch on the extent to which the discretionary powers that the Minister is taking on will be accountable to Parliament. The nation will discover to what extent accountability to Parliament will make up for the flexible measures and controls under which the steel industry has been operating up to the past few months. We have had many debates on Clause 2 and have referred to the Bill as a general nationalisation enabling Bill. In spite of Amendments there is no doubt that a Minister would have power to nationalise anything as the Bill stands. This is something which the country must not run away from.
The Minister and the Parliamentary Secretaries have assured us that the


powers would be used in the national interest, but who decides what that is? Is it the Minister, who may not be accountable to Parliament for any of the discretionary decisions that he takes until it is far too late? The accountability to Parliament comes when the annual reports are reviewed, well after the events. The day-to-day decisions of the Minister are not under review. This is why we have brought in the Amendments for affirmative Resolutions where the Minister has been able to exercise his discretion. Clause 2 says that the Corporation shall have power:
to hold such interests in companies as vest in them … with the terms of any general authority given by, the Minister, to acquire by agreement, and to hold, interests in other companies.
If that is not a general power to hold interest in any activity I do not know what is. The Clause goes on:
With the consent of, or in accordance with the terms of any general authority given by, the Minister, to form, or take part in forming, companies; and to exercise all rights conferred by the holding of interests in companies.
In spite of our endeavours this still gives the Minister powers not only on certain occasions to give a "yea" or "nay" but to cover it up by the term "any general authority" which was the subject of Amendments moved by us but not accepted on Report. This points the real dangers in this Measure. I welcome the power to provide for:
… any group of companies (whether consisting of all or any of the publicly-owned companies, other companies or both) any services which, in the opinion of the Corporation, can conveniently be provided as common services …".
This is the second reference I make to the Bill and it raises some of the points raised by the hon. Member for Sheffield, Brightside (Mr. Winterbottom) about collaboration, as against competition between the public and private sectors. There has always been co-operation, sometimes administrative, sometimes technical and sometimes in the sphere of advertising, between large companies, or subsidiaries of large companies, and small companies with similar interests.
There are trade associations where those with similar interests meet and dis-

cuss important commercial and technical issues and prospects with their customers. I presume that those will go on and that there will be trade associations involving both the private and public sectors. In Sheffield and elsewhere some firms have the cogging mills and others the finishing mills. Naturally the public sector will be more likely to provide the heavy facilities and the private sector the finishing, heat treatment, grinding, reeling and other processes.
I imagine that this will take place as a result of commercial arrangements. But when the big company happens to be a monopoly the situation is slightly different, because a small company cannot turn to an alternative company to provide a service if it can only be provided by the public company. I have in mind the large melting furnaces, cogging mills and presses and forges which might be used for these processes. This is why under Amendment No. 32, to which I spoke, and new Clause No. 9, were moved in connection with Clause 3, in the hope that the Minister would:
… secure that neither the Corporation nor a publicly-owned company shall show undue preference "—

Mr. Speaker: Order. We cannot at this stage go into Amendments.

Mr. Osborn: I am just pointing to the issues and I am not discussing the Amendment now. We raised the Amendments, and the importance of these issues. This leads me to the point made by the Minister who said that I and others were concerned with the protection of the private sector. Time and time again we have said that we are not concerned with the protection of the private or public sector. Our concern was that there should be fair competition in every respect and if, preadventure, there was not com petition then we wanted some way of ensuring arbitration, other than through the discretion of the Minister.
During the Report stage I brought in the case of Millom Hematite and Iron Company Limited. A notice sent out under Section 6 of the Iron and Steel Act, 1953, required:
Any person proposing to provide or procure the provision of any additional production facilities in Great Britain the cost of the provision of which is estimated to exceed £100,000 shall give particulars in writing of the proposal to the Board …


Later in the 1960 Act the particulars were better defined and additional information about existing facilities, quality of product etc. were required.
In the first Report of the Iron and Steel Board in July, 1953, a reference is made to the Act. It says:
The Act also provides, in Section 6, that the Board may require any person proposing to provide production facilities in Great Britain (including the replacement or adaptation of existing facilities but excluding any facilities concerned only with the casting of iron and steel) to submit all necessary particulars to the Board …
Spray melting is a process which we had discussed in Committee and on Report. In the case I cited the Board gave its reasons for refusing consent. I have this report which says:
The Board acknowledge the great skill and enthusiasm which has been put into the work, and many of the technical problems have been overcome. The next stage is to find out whether saleable steel products can be produced mere economically by the process than by conventional processes.
They then went on to say:
The Millom Company is not a steel works but a merchant iron plant … out on economic grounds they"—
the Board—
are reluctant to encourage the creation of new small-scale steel capacity when the whole trend in steel production is towards the economic advantages of large scale operation.
Naturally, Millom which had created Millspray spray steel melting, which we discussed on Second Reading and in Committee, put up a very good defence. It pointed out that at present:
… further development of the spray-refining process referred to in Paragraph 149"—
of the Iron and Steel Board Report—
seems the most promising approach to a continuous steel making process …
I do not want to go on, but this raises issues and principles which will confront the country from time to time in the new legislation. Who will decide in future whether a new project is viable?
No doubt many people have read "The Organisation Man", a book by White about the United States. This book gives the reasons why some in big organisations consider that the Millspray process has not been well planned or developed by the Millcm Company. The hard fact is that when the big steel companies were occupied with the L.D. and KALDO pro-

cesses they quite naturally did not want to dissipate their energies with a new process. Millom was a company prepared to take this on.
In previous debates in this House I have cited my own experience, where a small company can take on a new process or development that a large organisation does not want, and invariably make it work successfully and profitably. This is the type of case which could arise under the new system of discretionary authority when the Minister might say No "and stultify and frustrate vital flexible technological developments. Normally I agree that, where large-scale development is to be brought in operation, this must be done with carefully-planned research, development, and design programmes, such as could only be conducted by a large company.
We have discussed the international situation and not so long ago, in the January issue of the Iron and Steel Review, there was an article entitled "Heading Down" in which it was pointed out that the latest figure available at the time of writing for the production of crude steel was 445,000 tons, that is 13 per cent. down. The article went on:
In the light both of these general considerations and of a review of the prospects of the major steel-using industries, the home consumption of steel in 1967 can tentatively be put at about 21 million ingot tons as against 22½ million tons in 1966.
That is it was well down on previous years.
We have international competition, and this is why I interrupted the Minister when he used the phrase "co-ordinated pricing policy". What is rather interesting is that he now realises that a free-for-all, where one has excess capacity, justifies the British steel industry getting together with its competitors overseas. This is logical, if there is to be price stability. This amounts to a complete reversal of the policies which the present Government have started and put forward originally as one justification for the nationalisation of steel.
There must be this co-operation and that is one of the reasons why the old pricing policy was supported by the industry. It is satisfactory to know that the Minister, now that he has responsibility, is realising that there must be a balance between competition and price stability. This is something which faces


those who have charge of the destiny of the steel industry.
The Minister admitted that the steel industry would go through a difficult time. This is the result of two years of mismanagement of our economy. There will be, and have been, redundancies and short-time. More than two years of political threat has been hanging over the industry's head and has led to a certain amount of confusion. The hon. Member for Ebbw Vale (Mr. Michael Foot) pointed out that the mistake of the steel industry was that there was not enough capacity in 1959 yet there is excess capacity now.
Why did that excess capacity come about? There was a lot of outside and political pressure on the Government of the day to increase that capacity. The assessment of the amount of capacity required is a very difficult thing. If there is excess capacity, it is under-utilised and one of the reasons why the industry has been faced with a poor return of capital has been because not enough of the capacity is being used to the full.
I also dealt with the argument about whether the Government of the day did the right thing in having two strip mills, one at Colville's and the other in Wales. That was a political decision on sociological grounds, and I am certain that my hon. Friend the Member for Glasgow, Cathcart (Mr. Edward M. Taylor) can say that as a result of the Colville development there has grown up in Scotland a motor industry, which has certainly changed things there. At the time I was doubtful if this was a right decision, but during the course of this Bill and just before it I had the chance of reviewing some of the pros and cons, and I believe that the Government reached the correct decision.
I turn now to the subject of rationalisation. The Minister has praised the merger of Stewarts and Lloyds, Dorman Long, and South Durham Steel. On Second Reading and in the debates on the Industrial Reorganisation Corporation I reminded hon. Members that there had been a complete change in the national attitude towards amalgamations, mergers and takeovers. The Socialist Party, too, has changed its mind. I am sorry that he is no longer present, but I have to say that the hon. Member for Nelson and

Colne (Mr. Sydney Silverman) was one of the first to oppose a possible amalgamation of I.C.I. and Courtaulds, and did so very forcefully at the time. But we all now appreciate that a coming together is desirable and something to which we look forward.
However, rationalisation in the steel industry has not been confined to Britain. The Steel Review gives four factors for it. They are first, changes in technology —the emergence of the LD process; secondly, the rapid change in fuel and material transportation—the use of American coal on the Continent, coal which is denied to this country, the importation of iron ore instead of using our own; thirdly, the imbalance between world steel capacity and demand; fourthly, the whole issue turns on cash—steel works are expensive to build and the future managers of the industry will have to decide where they are to raise the money. This is a problem which will face everyone.
There is no doubt that the Corporation will inherit a vast diversity of interests—chemicals, building materials, civil engineering, agriculture, the production of fertilisers, general engineering, ranging from steel plant manufacture to almost every other kind of engineering activity. I have said before that the Corporation will have to decide what it is in business to do and whether a monolithic concern can efficiently run all these activities, even though separate steel companies have been doing so.
One or two interesting features have arisen. For instance, about 25 per cent. of the British constructional steel companies will be in the public sector. About 40 per cent. of all construction is for the public sector or nationalised industries. About one-quarter of the total employed in steel construction will be in the public sector and about one-quarter of the work will be undertaken by subsidiaries of nine companies in the public sector—Colvilles, Dorman Long, John Summers, Lancashire Steel Corporation, South Durham Steel, Stewarts and Lloyds, and United Steel. As a result of the nationalisation of steel about 25 per cent. of the steel construction industry will be in the public sector and that will be a factor which those producing buildings will have to bear in mind in future.
As I have said, rationalisation and concentration are desirable, but there are ways of bringing them about, provided that the political and economic climate is right, other than by nationalisation. With an ever-growing public sector, we are faced with the problem of finding Treasury finance for it. There will undoubtedly be a need for new steel works. Will the Treasury have the resources for them, bearing in mind our present difficulties? The European Coal and Steel Community has been able to obtain capital from countries outside Europe and much of it has been raised in this country. Will capital for steel making be available from outside these islands when steel is nationalised? I very much doubt it.
What will be the future of the new organisation? Will it in fact be a monolithic organisation, or will it follow the recomendations in the Benson Report, so that there are four or five competing groups? Will there be a degree of price flexibility if not exactly competition between these competing groups? If there is, how will there be an effective compromise between that and the international price stability which is necessary if the Corporation is to survive? Will the Minister find that he is in conflict with the Restrictive Trade Practices Act and the activities of the Restrictive Trade Practices Registrar, Mr. Sich? Will we have a unified price structure, the existence of which was given as a reason for attacking the industry, but which will probably now continue as a result of the nationalisation of the industry?
What will be the effectiveness of Parliamentary control? Will wastage be stopped by Parliament? I fear that it will not. Will discriminatory powers exercised by the Minister, however benevolent he may be—and I have no doubt that the present Minister has the industry's interests at heart—be fair and how will it be possible to question them?
Most of those who have been associated with the industry all their lives accept that the industry will have to operate in changed conditions; this can certainly be said of the Corporation and the 14 companies. The House can ask the Minister to ensure that there is fair competition. The difficulty is that it will be hard to bring about that fair competition.
The fear of many of my hon. Friends and of many people in the country is that the Organising Committee will find that it is faced with an impossible task. The worst thing which could happen would be for the Minister to fail. It will become apparent that this ill-conceived, ill-thought-out Bill will be difficult to operate, but the measures, however bad, outlined in this Bill still have the best wishes of the country as a whole, because failure would be a disaster to the nation.

7.37 p.m.

Mr. Frank Hooley: I must compliment my Parliamentary neighbour the hon. Member for Sheffield, Hallam (Mr. J. H. Osborn) on having tried to address his mind to some of the serious problems at issue in the Bill and in the industry. Too many of the speeches of his colleagues sounded rather like weary tirades of defeated captains now wondering whether they were fighting a good battle.
Steel has been described by a very great Parliamentarian as a commanding height of the economy, and that is beyond dispute. It is an industry of absolutely fundamental importance to our whole economy. If any proof of this be needed, it can be seen in the twenty-year battle for effective control of it by the Government in the name of the whole community.
The Bill can be said to introduce a slightly new principle into public ownership. I may be wrong, but I think that hitherto nationalisation Measures have been across the board. We have tried to take entire industries or virtually entire industries into public ownership all in one piece. The Bill adopts a more selective approach and deliberately sets out to take certain steel companies, admittedly the major part of the industry, about 90 per cent. of the capacity. Nevertheless, the Bill's approach is selective and it has endeavoured not to achieve a tangle of interests such as was a disadvantage in earlier nationalisation Measures. I know that hon. Members opposite have criticised the fact that extraneous interests are involved even under the present provisions, but I fear that that is inevitable. The Bill is the pattern for selective public ownership in the form which we want and which we shall apply more in future. Public ownership of this industry is an


absolutely essential basis for the sound planning of the industry and of the economy. This is substantially the case for bringing it under public control.
In looking at the industry's future and planning it, the fundamental criteria which we must consider are not crude yardsticks of profit or profitability but much more important considerations of efficiency—for example, in the use of manpower. It is established and well known, and it is not even excused by hon. Members opposite, that the industry is overmanned. The Iron and Steel Board has documented this, reported on it, and researched into it. Even if it had not done so, comparisons between Continental steel industries and our industry demonstrate it. It is of the greatest importance that this overmanning should be done away with and that the fullest and most effecient use should be made of manpower in the industry.
Another criterion of efficiency which has nothing to do with profit but which can be scientifically measured and calculated is the ratio of output of steel to the volume of materials used. Again, this is something which is nothing to do necessarily with crude monetary profit, but it has a great bearing on the efficiency of production and it can be objectively and scientifically measured to give us the index of the efficiency of the industry.

Sir Harmar Nicholls: Nobody would disagree with the hon. Member's wish for greater efficiency in this very important industry. Certainly if we can prevent wasted use of manpower and if we can use materials to better effect, that is a good thing. But in making that point there is no need to denigrate profit as a measuring rod. If there is greater efficiency in manpower and materials, that will reflect itself in greater profit. There is no point in denigrating profit as a measuring rod in considering whether the things which the hon. Gentleman wants to happen will happen.

Mr. Hooley: In certain market conditions it is possible to achieve considerable profitability without having efficiency. But if there is a monopoly grip on the market, or if a tariff barrier is erected, or if one distorts market forces or has undue power over the buyers, one

can have a high degree of profitability and, therefore, superficially a very good industry. However, when one considers the fundamentals, such as the use of manpower and materials—the more basic scientific criteria—one finds the industry is not nearly as efficient as the balance sheet would presuppose.
Apart from manpower and the use of materials, there is also expenditure on research. Year in, year out, the Iron and Steel Board has criticised publicly the level of research effort in the industry. It has said over and over again that not enough effort has been made and not enough money has been put into research and development. This is not propaganda from these benches. It is the considered, published view of the body set up by a Conservative Administration to supervise the operation of the iron and steel industry. If hon. Members opposite are not prepared to accept that, they must produce their own objective assessment to refute it. But, on the published evidence, it is irrefutable.
Another important criterion in modern days in measuring the efficiency of an industry is what is sometimes referred to as the O.S.E. ratio—the number of qualified scientists and engineers employed as a percentage of the total work force. It is an interesting ratio. I should not care to say how valid it is as a criterion of efficiency, but I am sure that, in an age in which scientific and technological advance is becoming more important every day, it is a ratio which cannot be ignored. On the published evidence of the Iron and Steel Board, the steel industry is defective in this respect compared with other industries. Even excluding the aircraft industry, which has special claims on qualified scientific manpower, iron and steel does not come out well compared with other industries in the use of highly-qualified scientists and engineers.
An hon. Member opposite said that private investment had been adequate for the needs of the industry. This is open to challenge. It is true that very large sums of money have gone into the industry from both public and private sources over the past ten or twelve years. But it is also true that in the last 15 years, at successive times, this country has been seriously short of structural steel and sheet steel. There was a time


when the University of Sheffield had work on its buildings halted for the lack of structural steel—a most ironic occurrence. The latest scandal is the shortage of pipe-making capacity.
These shortages have occurred because in past years there has been inadequate investment in capacity for producing these kinds of steel. As the economy has expanded and as the demand for these products has grown the industry has been unable to fulfil the requirements of the home market. It is on record that this country has had to spend thousands of millions of dollars on importing sheet steel and it is now unable adequately to meet demand for steel pipes.

Mr. Barber: Does not the hon. Gentleman think that the iron and steel industry could have anticipated the discovery of North Sea gas?

Mr. Hooley: Other steel industries seem to have been able to maintain a capacity adequate to meet demand. These pipes are being produced from somewhere. If we are not producing them, somebody else is. The gas is being piped, but the pipes are not being produced by our industry.
On the question of technological advance, the failure of the steel industry for many years to exploit adequately the new oxygen processes for steel making has been amply documented in the Iron and Steel Board's reports. It is true that we are catching up in this respect, but it also true that the initial investigations and development of these processes had to be borrowed from other countries. Obviously, one cannot criticise the steel industry for not inventing every new process. It would be absurd to suppose that new processes will not often be discovered in other advanced industrial countries. But it is an indictment of the steel industry, which is made by the Iron and Steel Board, the body set up by the Conservative Party, that the industry did not develop adequately the production of steel by the various oxygen processes.
I understand that Britain now has devised a very important and probably revolutionary steel-making process to which reference has been made in this debate—the spray iron process. It will be extremely important that the development of this shall be carried out at a place, in a manner, consonant with the

best technological requirements rather than in accordance with the needs of a particular company which may or may not be best suited by location, by capacity, by manpower to develop and use this process. I am not technologically qualified to comment on this, but I do believe that it is important that the development of this process, which I genuinely hope is a very great discovery, will be carried forward in the nationalised iron and steel industry in accordance with the best economic and technological considerations and not to suit the needs of some individual firm which may or may not coincide with those criteria.
I emphasise these things because I believe we must get British industry working to the criteria of efficiency in the use of manpower, in the use of materials, in the employment of research and the employment of scientists, in a way which will produce the maximum output of the particular commodity which the country requires, whether for electricity, gas, steel or something else, and not simply so arranged as to produce the maximum profit in market conditions which may possibly be wholly artificial and in any case can be manipulated.

Sir Harmar Nicholls: They must go together.

Mr. Hooley: It is perfectly possible to manipulate market conditions by excise, taxation, and monopoly.

Sir Harmar Nicholls: But if maximum efficiency is reached, and the efficient use of materials, whether we like it or not, there is bound to be a profit.

Mr. Hooley: It is perfectly true that if we do these things we are very likely to be able to compete effectively, but my point is equally true that if we start from the criterion of profitability, if we set this first, and if we manipulate conditions, as we can and have done for 40 years or more, so as to get profit, then the other considerations must tend to drift back into second place and this must seriously damage this country.
It has been said by one of my colleagues that the mere process of nationalisation could of itself solve the problems of the industry. I believe the whole House will agree that there are serious problems facing this industry in the next few years. There is the question of


capacity. It would appear at the moment, in present circumstances, that we have enough capacity, but I do not think sufficient allowance is made for the need to scrap obsolescent plant, which, I think, would run as high as three or four million tons of capacity.
I would hope a nationalised industry would take a long rather than a short term point of view, would look at the world, would hope the economies of the countries of Africa and Asia will expand, perhaps not as fast as we would hope, but will expand and will generate consumer demand which will have to be satisfied ultimately by machines and objects made of steel. I hope that, in planning our forward capacity, we shall take account of the possibility of the emergence of new demands and new requirements and rising standards of living, not merely in Britain, not merely in Europe, but throughout the world, so that this country can play a part in meeting the new demands as they arise.
Apart from the question of total capacity, there are clearly going to be difficult decisions to make about the location of whatever capacity we decide to have, and these decisions may prove difficult in social as well as in physical terms. In this regard, I am bound to say that the record of the National Coal Board in adjusting its manpower, both in total size and in location, has been far and away in humanity and in skill beyond anything ever achieved by a private industry. Apart from location there is the question of the type of location we are going to have. Industry, I gather, is pressing for multi-product concentration of production for groups of companies, in different areas which will produce different products. This does not seem, on the face of it, as satisfactory as concentration of capacity for particular products in particular areas, although I concede that this would cause very serious local problems in certain parts of the country. One thing is quite clear, and that is that forward planning is extremely urgent—and here I echo the words of the hon. Member for Hallam—for the good of the industry and for the good of the country.
It is important that this Bill goes quickly through the remaining constitutional processes so that this great and

vital industry can play its proper part in our national economy.

7.57 p.m.

Mr. Michael Shaw: I do not wish to follow in detail the arguments of the hon. Member for Sheffield, Heeley (Mr. Hooley), but I think it is right that I should refer to one point which he made. I believe that he has done a great disservice to the steel industry of this country in his allegation that it has completely fallen down in the supply of pipes for the new gas strikes in the North Sea. He is, of course, as is so often done, picking up the first headline without pursuing the follow-up headline the next day. It is perfectly true that in The Times of 25th May last year a headline was,
Britain must buy steel gas-pipes abroad. Minister shocked by dilemma arising from North Sea finds".
But then, in the next day's issue, we found headlines which said,
Steel industry rejects gas-pipes charge. Political kite flying. Some firms say that they can meet demand".
In reporting a B.B.C. interview it went on to say:
Yesterday Mr. Marsh, the Minister, thought there was no doubt at all that the British steel industry would be able to provide a very large proportion of the steel piping which is necessary, but he added, 'We may in the early stages have to import a limited amount of it from overseas.'".
The fact is that, due to the efficiency of the pipe-making industry, it has gone out abroad because it had got extra capacity, and it has found some very profitable contracts to fill up its order books. When the sudden demand came it could not immediately switch over to supplying all the new, immediate demand, but in the long term it had the capacity, and made arrangements for it. I believe the hon. Member's charge is unjustified.

Mr. Hooley: Is it not correct that an important factor was that pipe-making capacity was not carried through several years ago, before the question of North Sea gas arose, and is it not also correct that this ability now to meet the demands of the North Sea gas strikes has only come about because of cancellation of an extremely important export order?

Mr. Shaw: Yes, but that is the whole point. Surely that is the one thing that the steel industry, in my view quite


rightly, has learnt. With a market which fluctuates so violently, it is economic madness to set up an organisation to cope with the maximum possible demand which might be needed every two or three years. Clearly, the proper way to run a business is to run it so that the order book is filled up at a medium level of demand which, year in and year out can be completed. If there is a boom in any year, that can be coped with by importing from abroad, if necessary. That is the way to run a profitable business and to keep the people of the country most profitably employed.
However, I will not pursue that subject, because I want to turn to an aspect of the Bill which has received very little attention so far, and that is the question of compensation. I am only sorry that the right hon. Gentleman the Chief Secretary is not here to hear what I have to say, but I hope that it will be passed on to him. In particular, I should like to address my remarks to the subject of the redeemable fixed interest securities and the compensation therefor.
According to the Government's Explanatory Memorandum to the Bill, which came before us on Second Reading, the main purpose of the Bill is to bring into public ownership the principal companies concerned with the production of steel in Great Britain. To achieve that public ownership, it is obvious that the Government have to acquire the share capitals of all the companies named in the First Schedule, because the ownership of those companies goes with the share capital. Having acquired those shares and, with them, as a consequence, the ownership of the companies, the objective set out in the Bill has been achieved. Having done that, with the minimum of disturbance, in my view, there is no moral or equitable right wantonly to interfere with the financial obligations which have been undertaken previously by those companies when they were in private enterprise hands.
Like any companies requiring cash, these companies have borrowed. Some cash they borrowed long-term, some short-term, depending upon the needs for which they were borrowing. In so far as they borrowed long-term, obviously it was in their interest to create certain conditions both to protect themselves as regards repayment and so on, and also to

protect and attract those people who were lending them money. Therefore, the longer-term loans were arranged by means of moneys lent under solemn and binding agreements which were drawn up between the companies, on the one hand, and the representatives of the lenders, on the other.
These are debts, be they secured or otherwise. It is true that, in the majority of cases, they are secured under debentures. On the strength of the binding agreements which were entered into at the time of issue, the money was lent by the public. We find today that these companies which are to be nationalised have a total indebtedness by way of debenture notes and the like of some £120 million which has to be repaid over a period, at the latest dates, between 1974 and 1990 in accordance with the terms on which the money was originally lent.
I should add that I am not including one particular stock. The John Summers issue of 4 per cent. debenture stock is not being taken over under the Bill, again showing an inconsistency, because the lenders are required to be repaid on three months' notice if required, and there is a Section in the 1949 Act which excludes stocks redeemable within 12 months at par.
I believe that we on this side who served on Standing Committee D have done our best to bring alterations to the Bill, although we have not made nearly as many as we should have liked. Under the Bill, the Government will break those contracts which have been negotiated freely between the companies and the public. In particular, they will break them with regard to the rates of interest, the amounts of the capital repayments and the time of repayment, which is possibly one of the most important factors of all.
It is no use the Government arguing that they propose to give stock of an equivalent value. The conditions on which the money was lent are not being honoured and, in our opinion, they should be.
Not only are the stockholders entitled to have the conditions of their loans honoured. They should not be subjected, as they are under the terms of the Bill, to a loss in repayment rights of some £30 million. Do not let the Government run


away with the idea that that is a matter which just concerns themselves only. It is a matter about which the Stock Exchange itself has shown a great deal of concern and dissatisfaction.
In that connection, I want to quote a letter which was published in the Monthly Bulletin of the Stock Exchange from the Chairman of the Council of the Stock Exchange to the Chancellor of the Exchequer. It was sent off on 15th November, 1966. It says:
My Council has been considering the compensation terms proposed for holders of those redeemable fixed interest securities of Iron and Steel Companies which were offered for sale by the Iron and Steel Holding and Realisation Agency. The Iron and Steel Holding and Realisation Agency is a Government Agency which was established under the Iron and Steel Act, 1953, and in the prospectus or document of offer the securities to which we refer were clearly stated to be redeemable on certain conditions.
The importance is that not all, but a very large number—about £100 million worth —of those securities were issued through the agency of I.S.H.R.A., and therefore the Chairman, in my view rightly, feels that, as it is a Government agency, the Government have a responsibility in the matter.
The letter goes on:
In view of the terms on which those stocks were sold to the public, my Council consider that it is only equitable that the holders should be given the option of retaining their securities and thereby obtaining the redemption price at the appropriate time. The absence of such options would lay the Government open to the allegation that there had been a breach of good faith. It is my Council's wish that our Members should, in due course, be informed of the contents of this letter "—
which, of course, they have been.
To that letter, the Chancellor sent a reply in which he made three points as to why he denied the charge. The first is:
The question of the compensation of the holders of these securities was dealt with by the Chief Secretary to the Treasury during a debate on the Committee Stage of the Iron and Steel Bill on 23rd November. To allow the debentures and similar securities to remain in private hands after the nationalisation of steel would be impossible since the rights of the holders could frustrate the purposes of the National Steel Corporation, the Minister, and Parliament in any rationalisation or re-organisation of the industry.
His second point was:

I do not think that your suggestion that an option to holders of these stocks would have any advantage over the suggestion that these stocks should not be transferred to the Corporation at all but should all remain in private hands. Indeed, it would bring its own special difficulties, for instance over the period for the exercise of the option.
Thirdly, he said:
I cannot accept that there is any breach of faith involved in the compensation terms for these fixed interest securities. Several of the securities were indeed sold by the Iron and Steel Holding and Realisation Agency, but neither the Agency nor the Government was a party to the terms or conditions in the Prospectuses or Documents on Offer for the securities. The existing holders of the securities will receive fair compensation for them, calculated objectively from stock exchange prices.
Let us look at some of the excuses which the Government have put forward, some of which were aired in Committee, to justify the conditions laid down in the Bill, and to justify taking over these redeemable securities and issuing Government stock in their place.
First, the Government deny breaking any contract. The Chief Secretary—I am sorry that he is not here—said:
I thought that the hon. Gentleman"—
he was referring to my hon. Friend the Member for Yeovil (Mr. Peyton)—
made the point that the company which has borrowed the money on certain terms has its obligations and those obligations should continue. I am saying that this is quite right and that those obligations exist and continue. They exist in favour of the Corporation after vesting day, instead of existing in favour of individuals."—[OFFICIAL REPORT, Standing Committee D, 23rd November, 1966; c. 896.]
I am amazed that the Chief Secretary should have put up such a defence, because what is to happen is that the Government are to acquire a business with £120 million contracted debts, and at the same time compulsorily force certain of the creditors to part with their debts for less than £90 million. According to my reckoning this is making a quick killing of about £30 million. As we rightly said, if a private individual tried to carry out such a transaction he would very likely find himself in gaol.
The matter is accentuated by the fact that so many of the debts were issued through I.S.H.R.A., a point which, incidentally, was first raised by my hon. Friend the Member for Horsham (Mr. Hordern) in a Question to the Chancellor


of the Exchequer. This really means that in so far as they have been issued through I.S.H.R.A., the Government, through I.S.H.R.A., having offered those loans on stated published and binding terms to the public, are now, through this Bill, and having invited the public to lend money on those stated terms, proposing to break those terms and compulsorily to acquire loan stock from them. This is really the case, no matter how much window dressing may be put on it.
The second excuse for taking over this debenture stock is that it would hamper reorganisation. I accept that it would, but I do not accept that if the Government had the will to do so, it would be difficult to make arrangements whereby the stocks could continue in all material particulars as they have done before. The stock could have been taken over by the Corporation on the same terms, or it could have been taken over by the Government on exactly the same terms, thus preserving all the rights for the stockholders. This is what should have happened. The right hon. Gentleman, however, says, "No. We must take the action proposed in the Bill, because what we are seeking to do is not to continue the rights which existed before, but to give fair and just compensation", but no compensation can be fair and just if it involves the breaking of the original contract and the terms of it.
Another argument which has been used is that if the same terms were continued there would be fragmentation, in other words, there would be a number of small parcels of stock with lots of differing dates. I rang up a leading stockbroker in the City to ask whether there had ever been any difficulty in the marketability of these stocks, and when I told him the Government's argument, his reply was almost unprintable.
I detest the Bill, but it is clear that we will have to suffer its terms for a few years at any rate. There is a very important principle involved here, namely, that for the first time we are nationalising an important sector of this country's manufacturing industry, and this sector will be competing at all levels with the private sector. I believe that the Government have missed a wonderful opportunity, from their point of view. They have missed the opportunity of keeping to the original terms on which

these stocks were issued and of saying that in going into the iron and steel business—as the right hon. Gentleman at an earlier stage said they were—they were prepared to accept the disciplines and obligations which are normally applied in the private sector with whom they are now to compete.
The Government have failed to take that opportunity, and I believe that the fear will continue to mount and to fester that there is, and will continue to be, one law for the private sector and another for the public one. But, quite apart from whether that remark is justified, one thing is certain, namely, that these stockholders have been unjustifiably treated, and that contracts into which they freely entered have been wantonly broken by the Government.

8.18 p.m.

Mr. J. J. Mendelson: The hon. Member for Scarborough and Whitby (Mr. Michael Shaw), like myself, was a Member of the Standing Committee which went through the Bill with great care and improved it in some respects. Towards the end of his speech he said that he detested the Bill, and this, with variations, has been the theme song of the Opposition throughout the Committee stage and during the debate today.
Hon. Gentlemen opposite have not done themselves very much good by repeating this theme song, because it means that they are completely out of touch with people in the industry, who, at all levels, have accepted the decision of Parliament. As I told the Standing Committee, people at all levels in the steel industry have said to me, "Get on with the job. The main decision has been taken. We want you to do the job properly, but we want you to get on with it." 
There is no sympathy at any level in the steel industry today, be they senior managers, or junior executives, or technicians, or senior craftsmen, or senior steel producers, for anybody who merely strikes an attitude and says that he detests the Bill, but this theme song is linked with some of the statements made by the right hon. Member for Altrincham and Sale (Mr. Barber), who leads for the Opposition in this matter.
The right hon. Gentleman used to be the Member for a constituency not far


from mine, in Doncaster, and in an area where there are many steel workers and engineering workers. In spite of what he said this afternoon about the attitude of the electorate to this legislation his own experience is conclusive proof of the view that the electorate is taking. In several General Elections he carried on propaganda against the public ownership of the steel industry, in his constituency, next door to mine, while I was putting forward my own programme and that of the Labour Party.
The result was that we increased our majority substantially, while the right hon. Gentleman, on an anti-steel nationalisation platform, was defeated in Doncaster and had to find a seat elsewhere. I have had a good deal of experience in this matter because I fought my first by-election in June, 1949, in a constituency where, in Stocksbridge, I have one of the main steel works, belonging to United Steel Company. One morning a correspondent of The Times came to the constituency during the election campaign and wrote that because the Labour candidate, from the first day, had put the public ownership of the steel industry in the centre of his programme and had argued that it was essential, for the good of the British economy as a whole, that this vital industry should be under public ownership, that Labour candidate would lose several thousand votes from his majority. This theme was taken up by other newspapers which had not sent special correspondents to the constituency.
What happened? A few other special correspondents came down the next day, including Mr. Travers, the special correspondent of the Daily Telegraph. He interviewed me and said, "Can I come with you to the works?" I said, "Certainly, you can come to the works." We took another five correspondents along with us. I mounted my little platform in front of the steel works and made my speech as people were streaming out for lunch. Soon a youngish man came along and said, "May I have a word with you?" I said, "Certainly."
He was going to take me aside, but I said, "Do not take me aside, we have Mr Travers here, of the Daily Telegraph, and these other correspondents. The fate of the steel industry is a matter of

great public importance, not to whisper about. Tell me what you have to say in front of these gentlemen—unless it is personal". He said, "No, it is not personal". The correspondents crowded round. He said, "We know you. You spent some time in the works four or five years ago. About 400 or 500 people in the works know you personally. I have a message from the people who work there." I said, "What is it?" He said, "We are all behind you but the next time you nationalise the industry we want you to do the job right. We do not want you to be half-hearted about it. We want you to organise the industry in such a way that there is full understanding and full participation in the industry after nationalisation between the people running it and the people working in it." I turned to Mr. Travers and deliberately mentioned his name, because it is much better to give the name of a correspondent by one's side. Mr. Travers nodded, and a few different stories appeared the next day.
We had the majority of 11,000 in the preceding General Election and we had a majority of about 11,000 in that by-election, in spite of the prediction of The Times special correspondent. In the following General Election I put my programme forward in the same way and we slightly increased our majority, and in the next General Election I again urged as essential, among other policies, the public ownership of the steel industry, and we added another 2,000 to our majority. At the last General Election I did the same thing and we added another 3,500 to our majority. At all my meetings, steel workers and representatives of steel trade unions were on my platform, either providing the chairman or surrounding me and making supporting speeches. Other representatives of steel constituencies can tell similar tales.
The experience of my right hon. Friend the Member for Flint, East (Mrs. White)—who is now a member of the Government—is more remarkable. In the three years preceding the General Election of 1964 the directors of a major steel works spent many thousands of pounds in propaganda directed against her. I laughed when the hon. Member for Holland with Boston (Mr. Body) and the hon. Member for Scarborough and


Whitby referred to taking politics into the steel industry. This theme ran throughout our Committee proceedings. I had to laugh. Here were the directors of a company using thousands of pounds of shareholders' money in a vicious political campaign against my right hon. Friend in order to defeat her, without any accounting to their shareholders or to the electorate of the way in which they were using their money. In spite of spending these thousands of pounds they saw my right hon. Friend increase her majority by 3,500 votes in the subsequent election.
I am sorry that the hon. Member for Aylesbury (Sir S. Summers) is not here. He has intervened in our debates—not as a member of the Committee—and he normally prefaces his remarks, quite properly, by saying that he is in steel and has great experience of the industry. But he does not stand as a candidate in his steel area, or anywhere near it, so that the people in the industry can decide whether or not to send him to Parliament. He stands for Aylesbury. There are not many steel works in Aylesbury. It is famous for ducks, fowl and other things, but not steel.
There was another point, which was characteristic of the speeches made by the right hon. Member for Altrincham and Sale. He said the same thing many times in Committee, as did the hon. Member for Wanstead and Woodford (Mr. Patrick Jenkin). Having been defeated several times by the British electorate when the issue of public ownership of the industry had been clearly put to it, and knowing full well that they would be defeated if they ever dared to put the issue again to the electorate, they seek to escape by threatening the Government, and saying, "If you believe that this is going to be the kind of policy that is acceptable in New York, Rome or Paris you make a very great mistake".
The right hon. Gentleman quoted a snippet from the new evening journal published in New York. I recognised it because I was in New York when it appeared. He quoted the snippet—it is the only one he seems to have, because he quoted it in Committee, and we are familiar with it—as if it were the Holy Writ. Even if in a New York evening

newspaper in one of its first issues, as a new paper that saw the light of day on 12th July last year, a report appeared saying that we should not proceed with the nationalisation of the steel industry, what is the relevance of such an opinion?
Are we to be governed by articles in the New York boulevard Press? Is this a new tradition developing in the Conservative Party? Hon. Gentlemen opposite are, of course, the inheritors of the Disraeli tradition. Now they are saying that, having received a mandate from the British electorate, we must throw it away because somebody has written in a New York evening paper that we should do so. I urge my hon. Friends to remember this event for the next General Election.
This is no trivial point, remembering who originated it. The right hon. Member for Altrincham and Sale is not an insignificant back bencher whose views might be considered irresponsible and whose remarks can be hidden away. He is a former senior Member of a previous Conservative Government, and if the day dawns, of which there is little likelihood, of the Conservative Party coming to power again, the right hon. Gentleman will probably be a senior member of that Cabinet. With all his responsibility, he is prepared to use the strange argument that we must throw aside the views of the British electorate because someone has stated in a New York evening newspaper that we should do so.
There is a slightly more sophisticated version of this happening. Hon. Gentlemen opposite are threatening the Government that what they describe as the "dire consequences" of this Government's policies may affect our relations with Europe and may eventually make it impossible for us to negotiate entering the Common Market. Time and again hon. Gentlemen opposite have said, "You will not be allowed to have a nationally-owned and organised steel industry if you want to join Europe".
I invite the House to examine this argument and its basis. It has nothing to do with the attitude which any hon. Member might hold about our policy to enter the Community, although from time to time hon. Gentlemen opposite have tried to smuggle in a slight attack either on the basic attitude of my right hon. Friend the Minister of Power or on


some back benchers on this side of the House. What some of my hon. Friends and I may think about our approach to the Community is wholly irrelevant to this argument.
It has been decided by the British public that Britain's steel industry should, in the national interest, be taken into public ownership. That is a fact of life which hon. Gentlemen opposite must accept. The Government have a clear mandate to proceed and for hon. Gentlemen opposite to tell us to ignore our mandate and duty simply because it might be contradicting some of the provisions of the Iron and Steel Community is sheer nonsense.
Having said that, we must consider the argument because it is a novel doctrine. It is, of course, the abandonment of one's national sovereignty well ahead of even becoming a member of a supranational authority. It is turning the whole thing upside down. Arguments are going on about our approach to the Six, but the Government's policy is clear. The Prime Minister and Foreign Secretary are engaged in discussions, at the end of which they will make their decision on whether serious negotiations can be officially started. Despite this, the Opposition are arguing that at this stage we must say, "We cannot proceed with our domestic legislation we must ignore the views of the British electorate and surrender all our policies because if we continue with them we might be prejudicing our chances of joining the Community".
From the narrowest point of view—even from the simple diplomatic point of view—this is an irresponsible attitude to adopt. It means throwing away all our policies in advance, so that, in the end, we will not have anything about which to negotiate. It is a doctrine of nonsense and it reveals the quality of thinking which hon. Gentlemen opposite have been adopting on a matter as serious as this. It is not surprising that my right hon. Friend the Minister and other Government spokesmen in Committee found little difficulty in answering the policy points made by hon. Gentlemen opposite.
I turn to two aspects of the future of the steel industry which are more serious than the shadow boxing in which the Opposition have indulged throughout the

debates on this Measure. At a recent function in my constituency the matter I wish to raise was forcefully brought home to me. Practically all the speeches made by the various people representing the industry at that function emphasised the importance of this issue. As I go about my constituency, I find that it is a matter of major concern. I lead into the subject with such emphasis because no speech made at this stage of the Bill would be significant unless this matter is tackled.
We are facing a shortfall in production and we are aware that the steel industry is not isolated but is, in many ways, a function of other industries and is greatly affected by the general economic situation. It is the general deflationary aspects of the present situation which have contributed greatly to the steel industry's difficulties.
My first plea must be to the Government as a whole and to my right hon. Friend in particular, because he is a member of the Cabinet. There is urgent need to hasten an end to the deflationary policy now being adopted and to begin the reflationary process by various means, of which a cut in Bank Rate should be the first. Neither initial allowances nor other incentives can do the trick. The problem which industrialists are facing is that they must be reasonably certain that, at the end of a productive process, they will be able to sell their goods at a reasonable profit, so giving them the incentive to make greater strides forward. Initial allowances provide an incentive only once the decision is taken to invest or reinvest. A tax allowance is merely an additional incentive, but it does not, by itself, lead to new investment.
While many people are urging the Government to start the process of reflation, I wish to draw attention, from the point of view of the steel industry, to a particularly important matter which I raised in Standing Committee. My hon. Friend the Member for Rotherham (Mr. O'Malley) referred to it earlier. In Committee I moved an Amendment which urged the Government to have a new and more positive policy towards the stocking of steel. The argument is linked with one of the points made by an hon. Member on the benches opposite earlier this afternoon when he referred to the fluctuations in the demand for steel. The fluctuations in the demand for steel are


something that we must look at carefully at all times and not only at a time of economic difficulty.
The suggestion, however, that was made by the hon. Member was wholly futile. He suggested that all that had to he done was to ensure that we have a steady demand, that we keep fulfilling the orders as part of that steady demand and that we should not have any additional capacity but that if suddenly a good deal more is needed, steel should be imported from abroad. That seems to me to be a policy of despair and a wholly unnecessary policy.
What we have to do is to have a policy which allows us to deal with fluctuations in demand by having a certain amount of capacity and steel in stock. While we are still in the middle of an international balance of payments crisis, from which we hope to emerge this year or next year, we certainly could not advocate deliberately in such a situation a policy of paying in foreign currency for imports of steel. To do so would be the height of folly. That folly was shown up many years ago when the Spectator conducted an inquiry into the steel industry and showed conclusively that it was both inefficient from the viewpoint of the industry and, at the same time, very bad from the point of view of the country to spend foreign currency on importing steel.
Therefore, we must not be pessimistic about the capacity that we have. What we need is a policy of forward planning. I refer my right hon. Friend the Minister to what he said in Standing Committee when he said that he could not quite accept my Amendment but, on the other hand, he did not accept the case that was made in other quarters that a policy of stocking was impossible and impracticable.
I therefore invite my right hon. Friend at this point, when capacity working in the steel industry is not as high as it should be, actively to reconsider a policy of limited stocking at the present time and in the near future and to encourage the Corporation and the companies to stock a limited amount of steel—this need not be too expensive—so that there should be no further short-time working, until there is an upturn in trade and the demand for steel again increases. I do not believe

that if my right hon. Friend were to pursue such a policy he would see much opposition in the industry. Although many people are in favour of such a policy, there are a number who are gravely doubtful about it and their case has to be met.
I turn to the financial position of the industry. My right hon. Friend the Chief Secretary, who has just returned to the Chamber, missed one of the speeches in which a good deal was said about this. I will safely leave it to him to answer that whole complex of questions and I would not presume or attempt to try to do it for him, for reasons which are well known to all hon. Members. I want, however, to comment on the speeches which have been made today on compensation and on the innumerable speeches on this subject that were made in Committee.
For some hon. Members opposite, the whole debate came to life and was aflame when we were talking about money, the terms of compensation and the like. During those lively occasions and again today, a case has been made for more money to be paid in compensation or in many different ways to those who own shares in steel. For my part, I have repeated again and again in my constituency the words of my right hon. Friend the Chief Secretary, which cover the situation admirably, when he said in Committee and on other occasions that the Government had decided to offer fair-to-generous compensation. That is, he said, what a responsible Government should do, and that is the policy that the Government are pursuing.
What matters here, however, is that the view taken by those who have to deal in the stocks and shares of the steel industry has been consistently optimistic. They have not regarded the compensation terms as disastrous or bad. They regard them as good. All the articles which have appeared by people who have assessed these matters, in the Financial Times and elsewhere, since the end of the Standing Committee proceedings have been in that direction. They have said that the compensation terms are encouraging and they have encouraged people to buy the shares. There could not be a better test than this.
All those who make these big demands are asking for more money contributed


by taxpayers, rich and poor, in many positions in life, where tax is a difficult matter for those who have to pay it. What those who are advancing these demands are asking for, however, is that more of the taxpayer's money should be handed to one section of the community.
This is not money that the Government privately possess. It is not a matter for my right hon. Friend the Chief Secretary to go to his safe deposit and take out a few million £s and hand it over. He does not have the money. Even if he did, I still would not advise him to do it. But this is not the Government's money. It is the taxpayer's money.
The whole logic is that if more money in compensation is to be given to certain individuals, more must be taken from all sorts of people who have to contribute as taxpayers. Those taxpayers include many people in my constituency—elderly people, for example, who do a little part-time work or some overtime hours and who have to pay Income Tax if they fall within the relevant category. It would be a transfer of some of that money to those who have been represented so volubly and, in some cases, so violently by certain hon. Members on the benches opposite.
Those debates and discusions have been all to the good. I commend the Government on having allowed the debate to flow freely. Their decision was right. The future of this industry and of those who work in it and the economy of the country as a whole is a very grave, serious and important matter. It is right for the Government to have allowed the freest possible debate. I have always supported them in that view during the long and sometimes dreary hours in Committee. I hope that, at the end of the day, those in the industry will have their attitude accepted by all hon. Members of this House. The decision has been made; let us get on with the job.

8.46 p.m.

Mr. Edward M. Taylor: I shall be as brief as possible because other hon. Members opposite wish to speak in this debate. The debate has been a little disappointing because the attendance has not been very large. There has not been a great deal of excitement, apart from the usual brilliant speech

of my right hon. Friend the Member for Altrincham and Sale (Mr. Barber). One of the few bits of real joy was when the hon. Member for Ebbw Vale (Mr. Michael Foot) came in to show his joy and excitement at this triumph of stone-age Socialism. He assured us that if the Bill did not please the gnomes of Zurich it would please the dwarfs of Tonypandy. Then he left the Chamber. Another piece of joy was when the hon. Member for Penistone (Mr. Mendelson) came in after an absence—

Mr. Mendelson: The hon. Member is gravely misrepresenting me. I was present here throughout the opening speeches of my right hon. Friend the Minister and the right hon. Member who opened for the Opposition, and I have heard four back bench speeches delivered from the two sides of the House.

Mr. Taylor: The hon. Member could not have been making himself as noticeable as usual. I apologise for not noticing that he was present all the time. He made two significant points. The first point he also made in Committee, about the substantial and increasing majority which he has. He said this showed that the people of the country wants steel nationalisation. He is perhaps unduly modest. I think the reason is his personal abilities. The results of Gallup Polls show quite clearly that, far from a majority of the people wanting steel nationalisation, not even a majority of the supporters of his party want it. For the country as a whole, the percentage in support of steel nationalisation was 14 per cent.

Mr. Marsh: Since the hon. Member is placing so much weight on Gallup Polls and the lack of enthusiasm of the electorate for steel nationalisation, will he take his comments on the poll one step forward and comment upon how it applies to the Leader of the Opposition

Mr. Taylor: We are not afraid of changing opinions being reflected in ideology. They will turn our way. We are a modern party of change. One thing about hon. Members of the party opposite and their ideas is that they never change.
The main argument of the hon. Member for Penistone was that this was an election pledge by the Government and


election pledges have to be kept. I wonder how ridiculous he can become. If he looks at the grand list of pledges which have been made, he will find that there are many which my constituents in Cathcart would much prefer the Government to honour than this one ridiculous, reactionary pledge. What about keeping prices stable, reducing taxes, 3 per cent. mortgages, and a great increase in house-building? All these are pledges which my constituents would prefer to see honoured.
My great objection to this Bill concerns the expenditure of money. The Government are getting this industry at an unreasonably low price and the amount fixed for compensation is almost a swindle for the holders of shares, but in times of crisis such as these when there is a desperate shortage of capital, for the Government to spend around £600 million on this irrelevant exercise is the height of economic madness. With such a sum I ask the House to think how many of the real problems in our society could be dealt with—the problems of housing, hospitals, roads, university cuts, school-building. On all these things we could and should be spending much more money.
Instead of this, the Government are spending £600 million on the irrelevant exercise of nationalising steel, but, more significant, spending it at a time when, to get the money to do so—because the Government have not got the money; they will have to borrow it—the interest rates are such that they will have to pay a substantial rate of interest. Our children and grandchildren will still be paying after the year 2000 for this irrelevant folly on the part of the Government.
Throughout the Committee stage I endeavoured as best I could to draw the Minister's attention to the way in which the Bill would apply to Scotland. At the beginning I asked questions. To those questions I got no answers. I then did some minor probing to see if the Minister would accept certain points of view. He made it clear not only that they were not accepted but that they were points of view which had never occurred to him.
For the last time, and very briefly, may I put three significant points to the Minister about the Bill and its application to Scotland. First, do the Gov-

ernment accept or not accept that the Bill, if it is applied in the way in which we see it set out, will have an effect on Scottish steel? Will the effect be such that the steel industry will be expanded or contracted?
This afternoon the Minister gave a clear indication that one of the first things to be done would be a ruthless pruning of uneconomic and flabby sections of the industry. How will he assess a section of the industry is flabby and uneconomic? The tragedy of Scottish steel is not that it is flabby, which it certainly is not, not that it is uneconomic, not that it is inefficient, not that it is unprogressive or not modern enough, but that, simply because of the differential policies of the other nationalised industries, an unreasonable burden is placed on Scottish steel.
If the Government or the Corporation are to have regard only to the results of the various companies, unquestionably Scottish steel will be in danger of real collapse. This will not be because of inefficiency or lack of effort, but simply because the differential in coal price compared, say, with United Coke, costs Colvilles an extra £3 million a year. The differential to local rates between Scotland and England is that Colvilles pay an extra £ million a year. I cannot give an exact figure for the differential in the cost of gas and electricity, but it is estimated to be about £200,000 a year. There is one section of the new Corporation which will start off with a net deficit of £3¾ million per year which it must overcome before it makes a penny profit.
If this policy of ruthless pruning is applied, I fear for Scottish steel. If the Government will insist, as seems likely from the debates we had on Report, on having a differential pricing policy in which the prices applied in the various areas will represent costs, inevitably, as in every other nationalised industry, the price of the commodity will be higher in Scotland. If the cost of steel is higher in Scotland, this will affect our engineering, lighter industries, shipbuilding, etc. Inevitably this will have a devastating effect on Scotland.
Today I asked the Minister of Labour a Question about unemployment in Scotland. I asked him this straight question: what rate of increase had there been over


last month in unemployment in Scotland and in England and Wales? He told me that in the month between 12th December, 1966 and 9th January, 1967, unemployment in Scotland had jumped by 10·8 per cent. and that in England by 5·4 per cent. —exactly double. There are now 88,000 people unemployed in Scotland. The number increased last month by over 10 per cent., double the rate for England.
This is surely a serious situation. We are not asking for any question of subsidy. Give us equality and nothing else and the Scottish steel industry will be prepared to compete with the rest of the country and I believe it will compete successfully.
The one thing that has been undermining the Scottish economy year after year is that we do not have fair competition. We start with an unreasonable disadvantage solely because of our natural problems and the differential policies applied by the nationalised industries. I am not blaming the Minister for what has happened in the past—indeed, not even for what has happened in the past two years. I simply ask him to look to the future and see that the tragedy of coal, gas and electricity in Scotland is not repeated in the steel industry.
If the Government apply to steel the policy pursued in other nationalised industries, the outlook for Scottish steel and Scottish heavy industry generally will be very serious and I hope that he will consider this very seriously. I ask him to spend a few minutes discussing the matter with Scottish industrialists at all levels. I hope that he can indicate that his mind is not closed to the interests of Scotland.

8.55 p.m.

Mr. Cyril Bence: I have just five minutes to answer the repeated arguments of the hon. Member for Glasgow, Cathcart (Mr. Edward M. Taylor). He spent ten minutes attacking and criticising, except in one small respect, all the industrial policies followed for coal, gas and electricity by the last Government. He attacked everything that that Government did, except the benefit that it brought to Scotland by establishing the Colvilles strip mill.
The hon. Gentleman mentioned three items as constituting a serious factor for Scottish steel in making it uneconomic. But there are others. For example, there are the managerial costs which in the south and south-east of England and the Midlands are much higher than in Scotland. Site costs and administrative costs are also higher. That is why industry in many cases has been voluntarily moving to the perimeters of these areas where the costs are lower.
But in grumbling about these costs, the hon. Gentleman says that he does not want a subsidy for Scottish steel nor for Scottish coal. He does not want the miners of Yorkshire to subsidise the miners of Scotland. Yet he wants coal in Scotland to be the same price as it is from the more economic pits south of the Border. He wants to standardise prices on the one hand and then, on the other, says that this must not mean one part of an industry subsidising another. He must know that the two are incompatible, for standard prices would mean the more profitable pits subsidising the less profitable. He is quite illogical in the diatribe that he runs on these three items of costs.
Before the election, the Conservatives said in their manifesto that if returned to office they would undertake an examination for the purpose of reorganising the steel industry. They knew that the set-up was unsatisfactory. Every consumer of steel was complaining about trading associations and the cartel in steel prices. The shipbuilding industry of Scotland was complaining and asking the Government to take action that would enable it to buy steel at competitive prices. The hon. Gentleman's criticism of the present Government is quite unjustified.
The plea to leave the industry in private hands and to establish it on a laissez faire basis has been denied as a practical proposition by no less a person than the Chairman of the National Steel Co. of Wales. He has said that if the industry attempted to go on to a price competitive basis it would be catastrophic to the industry. In fact, he said that we would have to integrate and co-ordinate this high capital cost industry to enable it not to compete within itself but to compete with the large units of Europe and the United States.
In Britain we have to think not of a competitive industry to supply Britain but of a British competitive industry to supply the world. I believe that this reorganisation of the industry will put it in a position to compete in the world markets, which is what British industry must do if the country is to survive.
The country will not survive by wasteful, internal competition. It will survive and succeed by high quality organisation and production so that we can put our goods into markets abroad at competitive prices. We shall not do this if our industry is based on small units competing with each other. Such a system means that firms have not the resources and are unable to build them up. Colvilles could not raise the money for its new strip mill and the State had to provide it. This Bill is probably the best solution for the steel industry that has come before the House in the last 20 years.

9.1 p.m.

Mr. Patrick Jenkin: We are now on the last lap of what has been a very long race. In an hour from now the issue will be in process of decision. Third Reading debates always seem to have something of an air of a stale ham sandwich in a railway buffet. One is inevitably chewing over a well and truly digested subject.
But I do not think that that is an adequate excuse for the fact that throughout this debate, with the exception of about five minutes in the middle, when the hon. Member for Ross and Cromarty (Mr. Alasdair Mackenzie) was present, the Liberal benches have remained entirely empty. We had a Liberal Member on the Standing Committee, and one of the very few things which the Minister said in those 2,500-odd columns of Hansard with which I agreed was that, having listened to a few interventions by that Liberal Member for the Committee, no one was any the wiser as to why anyone should ever vote Liberal.
The Chief Secretary to the Treasury has in his time committed himself to some very startling propositions and I have in a number of debates had to take issue with him. But few of his propositions even with the benefit of hindsight read so startingly as that which he made during his Second Reading speech. On 25th July, complaining that the debate had been calm, he went on to say:

There is really no major opposition to the Bill."—[OFFICIAL REPORT, 25th July, 1966; Vol 732, c. 1343.]

The Chief Secretary to the Treasury (Mr. John Diamond): Hear, hear.

Mr. Jenkin: Having sat through the Standing Committee debates, having sat through three and a half days of Report and having studied the columns of the Press, how anyone could commit himself to that proposition passes my understanding. Standing Committee D is now a byword for tough, well-argued and above all sustained opposition, under, if I may say so, the superb leadership of my right hon. Friend the Member for Altrincham and Sale (Mr. Barber). No doubt in the end the Government will get their miserable Bill, but they have had to fight every inch of the way for it, and so they should.
The hon. Gentleman the Member for Penistone (Mr. Mendelson), who made a brief intervention a few moments ago, seemed to imply that because a decision had been taken in favour of giving the Bill a Second Reading six months ago at that stage all opposition should somehow have folded up.

Mr. Mendelson: Mr. Mendelson indicated dissent.

Mr. Jenkin: He seemed to suggest that the Opposition should not have pursued the Amendments they had tabled. The fact is that the Opposition were exercising not only their constitutional right but their duty in challenging the Bill every inch of the way and enforcing their Amendments to a Division as often as they could. Nevertheless, it would be wrong to ignore the very many cases—the right hon. Gentleman has had tributes paid to him in this respect and I gladly add mine—when the Government wisely yielded to superior argument.
This Bill contains no fewer than 50 Amendments and 4 new Clauses which have been inserted as a result of the Opposition. In counting that figure I have not taken into account any Amendment which the Government brought forward apart from Opposition pressure, nor have I counted a single Amendment in the Fourth Schedule, because those are merely consequential to other Amendments. This figure of 50 Amendments and 4 new Clauses represents a very significant number of battle honours for


Standing Committee D. They were inserted solely as a result of Opposition pressure, reinforced by the vigorous protests and angry deputations from the industry which the right hon. Gentleman has seen.
This tribute was paid in an article in The Times on 21st December under the heading "Safeguard for Private Steel Firms". It said:
It would be wrong to regard the Committee Stage on the Iron and Steel Bill which ended yesterday as a sterile affair from the point of view of the steel industry. The Government's will to nationalise steel was not shaken. But that was not the object of opposition in the Committee. Looking back at the work done since October 25 it is clear that several important concessions have been over run from the Government for the private sector of steel which will remain after nationalisation".
I would add for more than the private sector of steel. A total of 50 Amendments and 4 new Clauses give the lie to the foolish jibe that the Opposition was merely engaging in sterile obstruction, or banging its head against the stone wall of the principle of nationalisation. The debates were long and the arguments were fierce, but then, God knows, we have had enough to argue about. The longest arguments and debates took place upon the vexed subject of diversification.
Here I will break off for a moment to welcome the right hon. Gentleman the Member for Orkney and Shetland (Mr. Grimond), who is, with one minor exception, the first representative of his Party that we have had the good fortune to see today. I would hasten to add that we are delighted to have him, even at this late stage.
The hon. Member for Poplar (Mr. Mikardo) complained in Committee that after 20 years' experience of nationalisation the same old stuff had been dished up in the Bill—that 20 years had taught the Government nothing. As my hon. Friend the Member for Yeovil (Mr. Peyton) said, we had a lot of musty old bones into which the kiss of life had been breathed again. As so often is the case, the hon. Member for Poplar was wrong in one important respect. When Parliament passed the Coal Nationalisation Act, and the Gas and Electricity Acts, they were tightly-drawn and concentrated the functions and powers of the Board set up. In the words of the

hon. Gentleman the Member for Poplar in another debate, these Corporations were
… hamstrung by idiotic inhibitions".[OFFICIAL REPORT, Standing Committee D, 17th November, 1966; c. 657.]
This Bill has swung to the other extreme. It confers on the Steel Corporation powers to engage in virtually any activity, to take over any company it wishes, to take over any British company operating in any country of the world and to form new companies for any purpose it wishes. The scope is absolutely unlimited and the only check on this power is that the Minister's consent is needed. That is the only barrier standing in the way of what The Times call "wildfire diversification".
The only check is a Socialist Minister's veto. What is that worth? What is that worth from a Minister who has promoted legislation to give the National Coal Board power to go fiddling about in the North Sea prospecting for natural gas? What is it worth from a Ministry whose Parliamentary Secretary, who I regret to say is not present this evening, had in his election address:
We reject the selfish, greedy doctrine of capitalism
That is what stands between private industry and diversification by the Corporation. What is this veto worth from a Government which is encouraging the existing nationalised industries to gobble up their competitors as hard as they can. The Parliamentary Secretary to the Ministry of Transport knows that the Transport Holding Company is gobbling up all its companies as hard as it can go, and this is the Government whose Minister's veto is the only limit on diversification. The fears of industry were fully and entirely justified and the only check, that contained in Clause 2, and Clause 37, is absolutely worthless.
To do him justice, the Minister set out deliberately to try to allay those fears. In Committee he said:
There is no cause for private enterprise to be worried that this is a great State takeover".
He had earlier scoffed at fears that,
the Government have embarked upon some diabolical plot to undertake the complete nationalisation of British industry by the backdoor"—[OFFICIAL REPORT, Standing Committee D, 10th November. 1966; c. 447-–6.]


On Report, the right hon. Gentleman was at pains to point out that although the National Steel Corporation would have power to manufacture aircraft—it might be, he said, that one company would like to manufacture just one or two teensy weensy little aircraft—he asked why should they not. The Corporation has power to go into the contracting industry. How would it like to put up one or two little prefabricated steel houses? [An HON. MEMBER" Or build an airship."] It would be part and parcel of the Labour Party's old-fashioned doctrine if that was what it wanted to do.
We now know that all that verbiage was dust in our eyes, a mere smokescreen for the Government's real intentions, because all the world now knows that the Government's real intentions were embarrassingly revealed in all their stark nakedness by the hon. Member for Sheffield, Brightside (Mr. Winterbottom), for whom we on Standing Committee D conceived a real and warm affection. At one point he expressed his anxiety in writing to the Minister that he felt that the powers in Clause 2 were unduly restrictive. The then Parliamentary Secretary, now the Parliamentary Secretary to the Ministry of Technology, hastened to reassure him and wrote him a letter which, I am bound to say, ought to be learned by heart by every student of Ministerial indiscretions. Bless his little heart, the hon. Member for Bright-side published it in the Sheffield Telegraph!
After a passage in which the Parliamentary Secretary explained that there was this power to withhold consent when diversification was wanted, the crucial paragraph of this letter, which the Parliamentary Secretary wrote in rather chummy terms, was:
But Dick Marsh has asked me to assure you that he would be favourably inclined towards any request from the Corporation to extend their diversified activities when this would be to their advantage and that he would only withhold consent for significant reasons of national economic policy.
It would be any request when the Corporation thought it to its advantage and the only reason would be national economic considerations.
Were, then, all the earlier assurances given to industry so much empty verbiage? It is difficult to disagree with the verdict of the Daily Telegraph, which

said that it was hard to acquit the Government of deceit. The hon. Member for Brightside has performed a notable public service in alerting industry to the dangers of Clause 2.
By that time, industry was thoroughly alarmed by these powers and in due course a deputation from the C.B.I. waited on the Minister. In The Times of 15th December, The Times correspondent wrote—and it is somewhat surprising—
The C.B.I. is still, of course, totally opposed to the renationalisation of steel but at least it seems to have won some important concessions.
The threat of wildfire diversifications has receded…".
What assurances did the Minister give to the C.B.I. in this cosy private meeting in his office? How far has he derogated from the assurances which he gave to his hon. Friend the Member for BriAtside? In short, whom is the Minister selling down the river, his hon. Friends, or industry and the public? The Chief Secretary should give an answer. Which one is it? Has the threat of wildfire diversification receded, or does the position remain as in the letter to the hon. Member for Brightside?
Another matter on which we engaged in long and heated argument was compensation. If "deceit" is the right word to use for what the Government have done concerning diversification of the industry, the only word to apply to the compensation is "robbery". Nowhere have the Government's arguments, ably deployed by the Chief Secretary, been less convincing or more devious. He may have convinced himself and some of his hon. Friends, but he has not convinced the stock market, the financial Press, or the tens of thousands of private investors in the steel industry who bought steel shares and loan stock and who now stand by and see the Government grab these companies for compensation literally hundreds of millions of pounds less than their true worth. I will justify that statement and quote a few figures.
The truth of the matter is that the whole basis of valuation in Clauses 10, 11 and 12 is wrong. If one buys shares in small parcels, of course the market value is the true test of the value of the shares; that is appropriate because one is purchasing the dividends which the shares


will yield. But when one buys a whole company, one buys not merely the dividends which the company declares but all the profits which the company makes. In any take-over bid there is a substantial increase in the value of the shares because the take-over bidder knows that he will get the whole of the profits; and the whole of the profits of the company are almost always worth more than the aggregate value of the shares on the market.
The Bill—I do not think this point has been made before, but I believe it to be true—is an expression of the pernicious Socialist philosophy that the undistributed profits of a company do not belong to the shareholders. Their only right is to recieve dividends. The rest can be confiscated without compensation and with no hardship, loss or injustice. This was the philosophy which underlay the Corporation Tax which taxed dividends over and above the tax on profits. If the undistributed profits of a company do not belong to the shareholders, to whom do they belong? The argument is that they might as well belong to the State as to anyone else. The Bill stands as a stark testimony to that philosophy.
This under-valuation can be expressed in a number of ways. Over the last ten years, the steel industry has invested no less than £1,070 million in new capacity. The total compensation to be paid for the companies to be taken over is about £600 million—perhaps rather less. The cost of a new integrated plant on a green field site is approximately £120 per ingot ton of capacity. The State is taking over the steel capacity of these companies at a price of less than £30 per ingot ton of capacity—less than a quarter of the replacement value.
Take the nine companies whose shares are quoted. The compensation is about £470 million. The net assets, after deducting Government loans, are about £850 million—a difference of nearly £370 million. Take the question of profits. In 1965, which was perhaps the last reasonably typical year for the steel companies, the profits of the nine companies were approximately £60 million. Assuming a 7 per cent. coupon—even that may be too high in view of the cut in Bank Rate—the interest on the compensation stock will be £33 million. The balance—£27 million—is what the Government are

"pinching" for nothing; they are paying no compensation at all for that. That is why we contend that the basis of compensation is demonstrably wrong, demonstrably unjust, and, I may add, a deplorable example to the under-developed countries which are facing this problem.
But that is not the end. There is a crucial important consequences. When the accounts of the nine companies come to be consolidated, there will be a massive surplus representing the difference between the book value of the assets and the compensation paid. It will be more than the £370 million to which I referred because the unquoted companies will be in this as well. What I want to ask the Chief Secretary is, how is that surplus going to be dealt with in the consolidated accounts of the Corporation?
Because this is highly relevant to the European issue about which so much has been said. We have tended to concentrate on other matters—the 13 million ton unit under single direction, and so on—but this subsidy argument, because that is what it amounts to, is equally important. The Paris Treaty expressly forbids Government subsidy in any way. Under Clause 18 the commencing capital debt of the Corporation will consist of the compensation issue, the Government loan transfer and the transfer from I.S.H.R.A. shares and stocks of Richard Thomas and Baldwins. What will happen to the surplus?

Mr. O'Malley: The hon. Gentleman referred to the Paris Treaty forbidding Government subsidies. Is not this precisely what happens in the French steel industry, where the French Government allow the steel industry to use Government money on subsidised rates of interest?

Mr. Jenkin: I really cannot get involved in an argument between the European Steel Community and the French Government.
This, subject to anything the Chief Secretary may say, would amount to a subsidy here. We unfortunately came to what is now Clause 18 at 5 o'clock in the morning, when, naturally enough, the Chief Secretary was attending a conference somewhere else; he was not in his place to answer the question which arose. This is now his opportunity. It is of


crucial importance to this issue. How will the surplus be used? Will it be used to write off assets, or what?
The right hon. Gentleman referred again this afternoon to Amendments which he tabled in the early hours of Tuesday morning, especially the new machinery for joint consultation. Indeed, it was a somewhat remarkable scene in the small hours of Tuesday morning, with a number of his hon. Friends who tend to share certain views and who sit below the Gangway cheering him on, saying what a splendid thing this was—we were already in the dawn of a new era of industrial joint consultation, and so on. Well, they may be right. We shall wait and see. We wish this experiment well. There is no doubt that when other industries were nationalised nationalisation was followed by great disappointment among those in those industries who felt they would have much more say; indeed, some of them felt they would be running the industries, after nationalisation. There has been in fact little change since then.
There may be hon. Members here now who were here on 17th January and will remember how the right hon. Gentleman the Member for Easington (Mr. Shinwell), the Chairman of the Parliamentary Labour Party, complained to the Minister
Does my right hon. Friend realise that many miners, certainly in my area, though I do not know if he is aware of it, begin to have very grave doubts about nationalisation." —[OFFICIAL REPORT, 17th January, 1967; Vol.739, c. 18.]
Twenty years after the Coal Industry Nationalisation Act was passed they are beginning to have grave doubts about nationalisation. I believe more people are going to have grave doubts about the nationalisation of the steel industry. Certainly, there was a gentleman who was parading outside Corby steel works the other day and carrying, in relation to a strike, a banner which said, "Labour relations out: nationalisation in." I do not know what he thought he was going to get instead. But how many more people, how many other industries, are going to have to learn the hard way that nationalisation does not have any advantages?
I referred to 50 Amendments and 4 new Clauses, and those represent significant improvements to what is irredeemably and fundamentally a bad Bill. I now come to a matter of great importance, and I want

to refer to the new Clause which deals with the provision of information on figures and statistics. It has for many years been a source of criticism of the nationalised industries that their annual reports do not provide that wealth of detail of really vital figures which would show What sort of return had been made on the various activities and various parts of the businesses to enable the performances of the different units to be evaluated. In the case of the Steel Corporation this is to be put right by a very important provision in the Bill, and we shall look forward with interest to see what emerges in the reports of the Corporation.
We have also achieved important amendments for the private sector of the industry as The Times rightly mentioned, but the private sector will face some very formidable problems. For instance, will the forward investment programme rest on the whim of the Minister?
My hon. Friend the Member for Sheffield, Hallam (Mr. J. H. Osborn) mentioned the Millom Hematite Company, in whose case eventually an appeal may reach the Minister from a decision of the Iron and Steel Board. When the Bill becomes an Act, the only arbiter will be the Minister, and there will be no appeal from him at all. The private sector of the steel industry regard that as a possible strangulation of their lifeline, depriving them of the very right to exist.
Although we have improved the Bill in many respects, it remains a catastrophically bad Bill. Where the need is for greater enterprise and more competition, the Bill creates centralised control and massive monopoly. At a time when private industry is desperately in need of more confidence for the future and of encouragement to invest, the Bill faces it with the threat of subsidised State competition from a body with unlimited powers and finance, and responsible to a Socialist Minister—

Mr. Mendelson: rose
—

Mr. Speaker: Order. We cannot have an intervention in a peroration.

Mr. Jenkin: I say this in no unkind sense—responsible to a Socialist Minister with unlimited ambition. At a time when faith in the Government's financial competence and integrity of purpose is still at issue, we are faced with as nasty a piece


of confiscatory legislation as this House has seen for many years. At a time when the Government are deliberately forced to engineer rising unemployment, falling production, and a slump in investment, we are faced with a Bill which can only intensify those difficulties.
The 35 hon. Members opposite who have tabled a Resolution critical of the Government's policy on unemployment cannot support the Bill when they realise that, if they vote for this Measure, there will be men and women on the dole in 1967, because the Government are determined to force through the Bill this year. What an irony it is that the loudest clamour should come from those hon. Members opposite who shrieked loudest for this legislation.
Above all, the Prime Minister and the Foreign Secretary are staking their reputations on what purports to be an all-out bid to secure Britain's entry into the Common Market. Yet here we are faced with a Bill which, for many reasons, must make that task infinitely more difficult.
The right hon. Gentleman the Minister admitted that the Bill creates new obstacles, or, to use his own words, "poses problems of adaptation". The hon. Member for Ebbw Vale (Mr. Michael Foot) is not prepared to put up with that, but he does not want to get into the Common Market, as we all know.
This is an irredeemably bad Bill. On 10th March, The Times, in an article headed "Why the £ is Weak", said:
The £ is weak because the Labour Government is showing it has learnt nothing; it has committed itself … to proceed with the irrelevance of nationalising steel.
Right hon. and hon. Members who tramp through the Division Lobbies tonight in support if the Bill will do so knowing that it is irrelevant to Britain's economic recovery, knowing that it is making the Chancellor's task of winning economic solvency harder, knowing that it is blatantly confiscatory, knowing that it threatens wide sectors of private industry with takeover and subsidised competition, and, above all, knowing that it contradicts completely the Government's stated aim of entry into Europe.
On 8th November, the Minister committed himself to a revealing statement

when he said that this was an "umbrella" Bill. He was referring to the absence of any clues as to the organisation of the steel companies. The true fact is that this is an umbrella Bill. It is the Government's umbrella with which they parry the rain of Left-Wing brickbats hurled at the rest of Government policy. If anyone doubts that, let him read tomorrow the speech of the hon. Member for Ebbw Vale, when he said that this was "a sweet moment of triumph".
This is a shabby political sell-out of British interests and of British people. I urge my right hon. and hon. Friends to cut the Bill's miserable throat.

9.30 p.m.

The Chief Secretary to the Treasury (Mr. John Diamond): The hon. Member for Wanstead and Woodford (Mr. Patrick Jenkin) started his speech in a most courteous fashion by paying his regards to my right hon. Friend the Minister of Power and to his own right hon. Friend the Member for Altrincham and Sale (Mr. Barber), and I hope that I do not embarrass him by saying that he made an extremely good speech, as he did on many occasions in Committee. Any Member of the Opposition who has to fight for this length of time with such slender material deserves everybody's congratulations, and I hope, therefore, that the House will forgive me if I, too, start by saying in all seriousness to my right hon. Friend how delighted those who work with him are that he should at this early age have had the great responsibility of carrying an enormously important Measure against a very difficult Committee through the House, and above all of having achieved the complete co-operation of those in the industry which this Bill proposes to take over. To have done that is worthy of the commendation which I am sure everyone in the House would wish to give him.
It has been said that this debate has been rather like a stale ham sandwich, and that is true. We have a large House at the moment, but, as is well known, the House varied between a membership of two and eight on the Opposition side, and at one time as many as 14, but the Liberal bench never succeeded at any time to equal the two. The reason is exactly that stated by the hon. Gentleman in quoting my reference on an earlier


occasion. There are wide sections of the community who were opposed to this Bill, but who are no longer opposed to it. This includes the directors, the shareholders and, in fact, a large number of the Opposition who, in spite of the fight that they have had to put up in Committee to make a show of it, and to pay their obeisance to their one-time friends, have realised full well that there is no fight left in this because there is no real issue involved at all.
Let me explain why, and in the course of my reply I shall deal with as many of the questions as I can which have been put to me.
I said that the directors of the companies themselves were now reconciled to the situation. They recognise the need for reconstruction of the industry. They recognise that this can only be based on amalgamations which provide economies of scale, both as regards the size of firms, and as regards the size of plants. In case there is any doubt about that, I should like, and it is a tribute to them that I should do so, to give some of the quotations, some of the references, some of the speeches, and some of the comments in the papers with regard to that.
First, according to the Benson Report, the technical optimum size of works in the mid-seventies will be an annual capacity of 5 million tons for an integrated works including a strip mill, and one of 3½ million tons for a multi-project integrated works. These may even become bigger as time goes on. This is the optimum size. The figures published by the British Iron and Steel Federation in its October issue of Steel Review show that there is only one works in the United Kingdom with a capacity of more than 3 million tons. This compares with 14 in the United States, 5 in Japan, and 2 in the E.C.S.C., and according to the same figures we have fallen even further behind as regards company sizes.

Mr. J. H. Osborn: rose—

Mr. Diamond: I shall give way in a moment, when I have concluded what I have to say on this aspect of the matter.
In the United Kingdom there are no companies at all with a total annual capacity of more than 4 million tons, whereas in the Community there are 4, in the United States 8, and in Japan 5. I ask

hon. Gentlemen opposite who have been so critical of all this, how can a company whose total annual capacity is less than 4 million tons support a works of at least 3½ million tons, or as the case may be 5 million tons, as recommended by the Benson Report?
It is not surprising that this month's issue of Steel Review said that we must
press on fast with the creation of larger company groupings which are both commercially advantageous in the shorter run, and provide the base for movement towards that concentration of production into a few very big, well-located works which the Benson Report set out as the longer-term aim".
It is clear that there has been a complete recognition of the need for a reconstruction of the industry.

Mr. J. H. Osborn: It is easy to distort the truth in quoting figures from the review. In fact, 23 per cent. of the steel companies in the E.C.S.C. have a production below half a million tons, whereas only 21 per cent. are below that figure in this country. So there are more small firms in the E.C.S.C. As for the range—

Mr. Diamond: I must continue if that is all the hon. Member wants to say by way of an intervention. This is not the time for making a speech. I did not say a word about small firms. We are not concerned with them. Of course there may be small firms.

Mr. Osborn: rose—

Mr. Speaker: Order. The hon. Member has already intervened. We must go on with the debate.

Mr. Diamond: I cannot give way again. If the hon. Member is trying to maintain that there is no need for an amalgamation, or for increasing the size of firms and plants, he is the only person in the whole country who is attempting to say so. I am drawing a fair comparison, and I thought it was agreed by the Opposition—certainly it is a point of view held by my right hon. Friend and by the steel industry—that there is no question about the need for amalgamation; the only question is whether it could have arisen before, or whether it is necessary to step in to provide for the possibility of this expansion. It is clear form the timing and everything that has gone on that the barriers share ownership


have prevented the necessary amalgamations and the kind of concentration which alone can achieve an efficient industry.
The hon. Member for Cirencester and Tewkesbury (Mr. Ridley) said that this was not the fault of the steel industry; the fact was that the new oxygen process which alone permitted large steel plants had been discovered only recently. The process to which he was referring was the L.D. process. The letters "L.D." stand for Linz-Donawitz. Linz is the town in Austria. That is a reminder that this process, which has been widely adopted and was installed in the 1950s, was the invention of the nationalised Austrian steel industry. We are grateful to the hon. Member for so reminding us.
His argument is completely wrong, because it is at least six years since our competitors installed this process, and they are way ahead of us. Furthermore, this process is compatible with a small as well as a large plant. It has nothing to do with the size of plant.

Mr. Ridley: rose—

Mr. Diamond: The hon. Member must not think that he has a right to be controversial the whole time. He made his speech and I listened to him. I am giving him his reply. If I am to give way to everybody who wants to intervene I shall not be able to reply to those Members who have asked me important questions.
It has nothing to do with the L.D. process. It is simply that although other countries have found themselves capable of amalgamation and reconstruction, notwithstanding that they have a privately-owned industry, the British industry has not found itself capable of so doing without help from outside, and we are giving that help.

Mr. Ridley: rose—

Mr. Diamond: The hon. Member knows that I am only too glad to give way, but if, every time an hon. Member wishes to raise an argument, I am told, "You must give way", we shall have a double speech on every question to which I reply. I will then be able to reply to only half as many. However, I give way on this occasion; but it will be the last.

Mr. Ridley: May I help the right hon. Gentleman? [Interruption.] He is be-

traying a woeful technological ignorance. The point is that by inventing converters of 300 to 400 tons capacity it has been possible to make the cheapest steel at levels of 3½ million to 5 million tons. It is not the invention of the process but the British development of the large-scale converters which has brought about the need for amalgamation.

Mr. Diamond: I am grateful for what the hon. Gentleman said, but it does not affect the argument in the slightest. [Interruption.] It is not open to this country alone to build large plants and to have amalgamations resulting in large firms. The curious thing is that it has been open to our competitors to do so, and they have done it. We have been left miles behind and the only conclusion to draw—the conclusion which was drawn by the Benson Committee—is that there is need for this to be done. It should be remembered that the Benson Committee did not say in its Report that it should be done by nationalisation. That is because the instructions to that Committee were to exclude the question of nationalisation; and it had to proceed as best it could.
I repeat that it is because of this that there is a realisation that there had to be reconstruction. Private ownership did not permit it. Indeed, privately-held shares created barriers to it. We are now providing the means whereby it can be done. We have the support of the industry and I hope that we shall have the support of the Opposition in the years ahead, joining with us in saying that we hope it will be successful because we want it to be a fruitful and efficient industry.
As everybody knows, my right hon. Friend has appointed an Organising Committee. The three leading members of the industry have joined it. Their action was welcomed by the British Iron and Steel Federation in these words:
The Federation appreciates the contribution to the future wellbeing of the industry being made by those steel makers who have decided to assist the work of the Organising Committee.
Another Chairman, Sir Julian Pode, also welcomed it. [Interruption.] This may not be welcome to some hon. Gentlemen opposite. We are trying to look on this as the people who are responsible to the country. This must be trying to some hon. Gentlemen opposite, particularly to


some of those now seated below the Gangway opposite who have not listened to a word of the debate but have just come into the Chamber. [Interruption.]

Mr. Speaker: Order. We have had a debate today without a running commentary. I do not want one to start now.

Mr. Diamond: I was saying that Sir Julian Pode, Chairman of the Steel Company of Wales, according to a report in The Times on 18th January, said:
It now becomes the duty of your Board, staff and workpeople to support to the full the Organising Committee for the National Steel Corporation, and, later, the National Steel Corporation itself when set up.
I was right in suggesting in the first place that there is no issue left here. There is no passion left in this at all. It is an issue which was put to the country and which WAS accepted a long time ago, and at the last General Election the country accepted it for good It is only the Tories who are carrying out a rearguard action.

Mr. Barber: The right hon. Gentleman just said, "It is only the Tories who are carrying out a rearguard action." Every person to whom the right hon. Gentleman has referred is vehemently opposed to nationalisation. Will he now answer the question I put earlier? The considered view of the Confederation of British Industry is as follows:
The National Steel Corporation would stifle enterprise, create inefficiency and eliminate diversity.
Let us have the right hon. Gentleman's comments on that?

Mr. Diamond: I have been asked at least 15 important questions and I would like to answer them.

Mr. Barber: Answer my question.

Mr. Diamond: I will be only too glad to come to the right hon. Gentleman's question and answer it in its turn. I am grateful to him because his intervention proves how foolish it is of me to give way so often. I have shown that, from the point of view of the directors, we have their full co-operation. This is a tribute to my right hon. Friend for the functioning of the Organising Committee.
I come to the question of the shareholders because a lot has been said about the way in which they have been treated,

and one hon. Gentleman opposite referred to the way in which they were being "robbed". What is the true position? They are offered compensation which results in their being paid, on the basis of market figures, a figure of £45 million over and above the figure at which they could have sold their shares. [HON. MEMBERS: "Too much."] I hear some of my hon. Friends saying "too much". I have explained before that it was more than they could have voluntarily sold their shares for. As I have frequently said, it represents a generous interpretation of "full and fair compensation." It is right that when a Government are denying to a shareholder the possibility of voluntarily disposing of his shares or of voluntarily keening them, something over the odds should be paid to take that into account.

Mr. Robert Cooke: rose—

Mr. Diamond: I will not give way.

Hon. Members: Give way.

Mr. Speaker: Order.

Mr. Diamond: If I give way I will not have time to deal with all the points I want to answer.

Mr. Robert Cooke: You dare not give way.

Mr. Diamond: I will bring the position a little more up to date. After that had taken place, the shares were quoted at varying prices, although they did not vary very much. Towards the end of November, however, the shares which were subject to takeover by compensation at a figure of £45 million more than their White Paper price—the time of the White Paper issue—fell to a figure of something like £55 million below it. Although the Bill was out the shares were quoted towards the end of November when we were in Committee at something like £55 million less than the compensation payable if the Bill went through. It is not surprising that in those circumstances the anxiety expressed by the right hon. Gentleman and his hon. Friends in Committee was not lest we should carry out our threat to nationalise. The anxiety was lest we should not carry out our undertaking.
I was asked to give a firm assurance and I gave it. What do hon. Members think happened to the prices of the shares when I gave that firm assurance? They went up by £16 million as a result of the assurance, on the responsibility of a Treasury Minister, that as soon as the House gave us the powers we would proceed with the Bill and the compensation therein provided. There is, therefore, no question but that the shareholders' anxiety, despite what is pretended to be said on the benches opposite, is one alone lest we do not carry out our undertaking to nationalise and pay these compensation figures.
The Opposition have asked me a number of questions, trying to pretend that there is still some passion on this issue and that they feel greatly interested in it. I will try to deal with as many of the questions as I can. The first is that we imperilled confidence in the economy, and in particular in sterling, by deciding to nationalise the steel industry. That has been said by the right hon. Member for Flint, West (Mr. Birch) and it has been repeated by the hon. Member for Wanstead and Woodford.
The curious thing is that this, our final step in the House of Commons to nationalise the steel industry by giving the Bill its Third reading, coincides, curiously enough, with the best day for sterling that one can remember for a long time. The right hon. Member for Altrincham and Sale and his right hon. Friend the Member for Flint, West, who have made many speeches on this topic, will be delighted to know that, measured in the usual way, confidence in sterling, which is very important, is higher now than it has been for very many months and we have reduced the Bank Rate by one-half of 1 per cent. If the right hon. Gentleman wants to talk about timing, I could not find a more appropriate piece of timing than to reduce the Bank Rate and to have this reassurance of confidence in sterling at the very moment when we are passing the Third Reading of the Iron and Steel Bill.
The right hon. Gentleman said that the timing was wrong and that we were doing this at a time of crisis. He would have been delighted for us, no doubt, to nationalise the steel industry at some other time—

Mr. Barber: rose—

Mr. Diamond: —would he not?

Mr. Barber: Since I have been asked a question, I will answer. This afternoon, in relation to the strength of sterling, I quoted merely the Chancellor of the Exchequer and a New York newspaper. I ask the right hon. Gentleman this in relation to what he is saying—

Mr. Diamond: rose—

Mr. Speaker: Order. If the Minister allowed the right hon. Gentleman to intervene, he must take the consequences.

Mr. Barber: I put this point to the right hon. Gentleman. As a Treasury Minister he must answer. The Times said—

Mr. Speaker: Order. Interventions on interventions must be brief.

Mr. Barber: I will be very brief. The Times made it clear that this would do sterling harm. What has the right hon. Gentleman to say about that?

Mr. Diamond: I asked the right hon. Gentleman, when he was complaining that we were nationalising steel at a time of crisis, at which time he would have liked us to nationalise it. If he would not like us to nationalise steel at any time, it was an unfortunate kind of argument to use.
The next thing about which the Opposition make a great song and dance is the problem of diversification. There is common ground between the two sides on one thing and there is not common ground on another. What there is common ground about is that we do not believe that nationalised industry should compete on unfair terms with private industry. What there is not common ground about is that we do not believe that nationalised industry should not have an opportunity of competing. That is what the right hon. Gentleman and his hon. Friends are afraid of.
If the right hon. Gentleman will be good enough to refresh his memory on what was said by the industry itself, the Federation said in a booklet published in 1964:
The industry has no one simple, tidy pattern: companies sprawl across all demarcation lines, following trading opportunities whenever they arise. Would Labour take over only


the steel elements in companies, thus dismembering closely-linked units?
Why should they have the opportunity to follow trading opportunities wherever they arise and not the nationalised Steel Corporation? If the party opposite wants to destroy the enterprise, if it wants to take the heart out of good management, it should just stop the industry from proceeding where business naturally leads and where it is in the interest of the industry either in earlier processes or later processes.
Let us be clear, there is no proposal to deny the privately-owned industry the winds of competition which the nationalised industry will provide. What we shall achieve by having a proper financial target—this answers the right hon. Gentleman's question about what has happened, to the alleged surplus, as he described it, it is all wrapped up in providing the appropriate target—what we shall achieve by providing that target—[Interruption.] This is a short way of answering the question which the right hon. Gentleman thinks there is great complication about. It is quite straightforward: there is no such surplus in practice. All that arises is the need to fix the rate of profit earned on the capital invested and to have regard to the circumstances, including those he mentioned. If that is fixed realistically the steel industry in all its respects will have to provide a proper return and therefore will be forced to compete in a realistic way with privately-owned industry.
That is the situation in regard to diversification. Then it is alleged that, of course, we are responsible for putting steel into politics. That is an extraordinary statement to make. Steel has been in politics since 1933, when the party opposite gave it certain protection

and, because of that protection, insisted on a measure of supervision under the Import Duties Advisory Council. That has been going on since 1933 in one form or another. It has been in politics all that time and it is far from true to say that we put it there.

The curious thing about the Tories' complaint is that during their period of office they maintained a partly privately-owned and partly publicly-owned steel industry and deliberately turned the publicly-owned steel company into the largest company of the lot by infusing new capital into it. To try to pretend that there is any real antagonism to steel nationalisation is quite beyond the point.

The summary of the situation is clear. Rationalisation is recognised by all of us to be needed by those in the steel industry and by those outside. Some believe in one method of achieving it, some in another, but all agree that the worst thing that could possibly happen would be that there should be continuing uncertainty. The steel directors themselves recognise this fully. I shall quote for the last time what Mr. Judge, the President, said in his address to the Iron and Steel Federation in March last year, just before the election:
The British steel industry stands plagued with the political atmosphere of nationalisation and denationalisation ad infinitum. I would like to feel confident that the Government we have after the Election will see that there must be an end to this. Britain needs a real and lasting solution for steel.
Here it is.

Question put, That the Bill be now read the Third time: —

The House divided:Ayes 306, Noes 220.

Division No. 259.]
AYES
[9.59 p.m.


Abse, Leo
Bidwell, Sydney
Butter, Mrs. Joyce (Wood Green)


Albu, Austen
Binns, John
Callaghan, Rt. Hn. James


Allaun, Frank (Salford, E.)
Bishop, E. S.
Cant, R. B.


Alldritt, Walter
Blackburn, F.
Carmichael, Neil


Allen, Scholefield
Boardman, H.
Carter-Jones, Lewis


Anderson, Donald
Booth, Albert
Chapman, Donald


Archer, Peter
Boston, Terence
Coe, Denis


Armstrong, Ernest
Bottomley, Rt. Hn. Arthur
Coleman, Donald


Atkins, Ronald (Preston, N.)
Boyden, James
Concannon, J. D.


Atkinson, Norman (Tottenham)
Bradley, Tom
Conlan, Bernard


Bacon, Rt. Hn. Alice
Bray, Dr. Jeremy
Corbet, Mrs. Freda


Bagier, Gordon A. T.
Brooks, Edwin
Craddock, George (Bradford, S.)


Barnes, Michael
Broughton, Dr. A. D. D.
Crawshaw, Richard


Barnett, Joel
Brown, Hugh D. (G'gow, Provan)
Cronin, John


Baxter, William
Brown, Bob (N 'c'tle-upon-Tyne, W.)
Crosland, Rt. Hn. Anthony


Bellenger, Rt. Hn. F. J.
Buchan, Norman
Crossman, Rt. Hn. Richard


Bence, Cyril
Buchanan, Richard (G'gow, Sp'burn)
Culten, Mrs. Alice


Bennett, James (G'gow, Bridgeton)
Butler, Herbert (Hackney, C.)
Dalyell, Tam




Darling, Rt. Hn. George
Janner, Sir Barnett
Pavitt, Laurence


Davidson, Arthur (Accrington)
Jay, Rt. Hn. Douglas
Pearson, Arthur (Pontypridd)


Davies, Dr. Ernest (Stretford)
Jeger, Mrs. Lena (H'b'n&amp;St. P'cras, S.)
Pentland, Norman


Davies, G. Elfed (Rhondda, E.)
Jenkins, Hugh (Putney)
Perry, Ernest G. (Battersea, S.)


Davies, Harold (Leek)
Jenkins, Rt. Hn. Roy (Stechford)
Perry, George H. (Nottingham, S.)


Davies, Ifor (Gower)
Jones, Dan (Burnley)
Prentice, Rt. Hn. R. E.


Davies, Robert (Cambridge)
Jones, Rt. Hn. Sir Elwyn (W. Ham, S.)
Price, Christopher (Perry Barr)


Davies, S. O. (Merthyr)
Jones, J. Idwal (Wrexham)
Price, William (Rugby)


Delargy, Hugh
Judd, Frank
Probert, Arthur


Dell, Edmund
Kelley, Richard
Randall, Harry


Diamond, Rt. Hn. John
Kenyon, Clifford
Rankin, John


Dickens, James
Kerr, Dr. David (W'worth, Central)
Redhead, Edward


Dobson, Ray
Leadbitter, Ted
Rees, Merlyn


Doig, Peter
Ledger, Ron
Reynolds, G. W.


Driberg, Tom
Lee, Rt. Hn. Frederick (Newton)
Rhodes, Geoffrey


Dunn, James A.
Lee, Rt. Hn. Jennie (Cannock)
Roberts, Albert (Normanton)


Dunnett, Jack
Lee, John (Reading)
Roberts, Goronwy (Caernarvon)


Dunwoody, Mrs. Gwyneth (Exeter)
Lestor, Miss Joan
Roberts, Gwilym (Bedfordshire, S.)


Dunwoody, Dr. John (F'th &amp; C'b'e)
Lever, Harold (Cheetham)
Robertson, John (Paisley)


Eadie, Alex
Lever, L. M. (Ardwick)
Robinson, Rt. Hn. Kenneth (St. P'c'as)


Edwards, Rt. Hn. Ness (Caerphilly)
Lewis, Arthur (W. Ham, N.)
Robinson, W. O. J. (Walth'stow, E.)


Edwards, William (Merioneth)
Lewis, Ron (Carlisle)
Rodgers, William (Stockton)


Ellis, John
Lipton, Marcus
Roebuck, Roy


English, Michael
Lomas, Kenneth
Rogers, George (Kensington, N.)


Ennals, David
Loughlin, Charles
Rose, Paul


Ensor, David
Luard, Evan
Ross, Rt. Hn. William


Evans, Albert (Islington, S.W.)
Lyon, Alexander W. (York)
Rowland, Christopher (Meriden)


Evans, Gwynfor (C'marthen)
Lyons, Edward (Bradford, E.)
Rowlands, E. (Cardiff, N.)


Evans, Ioan L. (Birm'h'm, Yardley)
Mabon, Dr. J. Dickson
Ryan, John


Fernyhough, E.
McBride, Neil
Shaw, Arnold (Ilford, S.)


Finch, Harold
McCann, John
Sheldon, Robert


Fitt, Gerard (Belfast, W.)
MacColl, James
Shinwell, Rt. Hn. E.


Fletcher, Raymond (Ilkeston)
MacDermot, Niall
Shore, Peter (Stepney)


Fletcher, Ted (Darlington)
Macdonald, A. H.
Short, Rt. Hn. Edward (N'c'tle-u-Tyne)


Floud, Bernard
McGuire, Michael
Short, Mrs. Renée (W'hampton, N.E.)


Foley, Maurice
McKay, Mrs. Margaret
Silkin, Rt. Hn. John (Deptford)


Foot, Sir Dingle (Ipswich)
Mackenzie, Gregor (Rutherglen)
Silverman, Julius (Aston)


Foot, Michael (Ebbw Vale)
Mackie, John
Silverman, Sydney (Nelson)


Ford, Ben
Mackintosh, John P.
Skeffington, Arthur


Forrester, John
Maclennan, Robert
Slater, Joseph


Fowler, Gerry
McMillan, Tom (Glasgow, C.)
Small, William


Fraser, John (Norwood)
McNamara, J. Kevin
Snow, Julian


Fraser, Rt. Hn. Tom (Hamilton)
MacPherson, Malcolm
Steele, Thomas (Dunbartonshire, W.)


Freeson, Reginald
Mahon, Peter (Preston, S.)
Stewart, Rt. Hn. Michael


Gardner, Tony
Mallalieu, E. L. (Brigg)
Strauss, Rt. Hn. G. R.


Garrett, W. E.
Mallalieu, J.P.W. (Huddersfield, E.)
Swain, Thomas


Ginsburg, David
Mapp, Charles
Swingler, Stephen


Gordon Walker, Rt. Hn. P. C.
Marquand, David
Taverne, Dick


Gourlay, Harry
Marsh, Rt. Hn. Richard
Thomson, Rt. Hn. George


Gray, Dr. Hugh (Yarmouth)
Mason, Roy
Thornton, Ernest


Greenwood, Rt. Hn. Anthony
Mayhew, Christopher
Tinn, James


Gregory, Arnold
Mellish, Robert
Tomney, Frank


Griffiths, David (Rother Valley)
Mendelson, J. J.
Tuck, Raphael


Griffiths, Rt. Hn. James (Llanelly)
Mikardo, Ian
Urwin, T. W.


Griffiths, Will (Exchange)
Millan, Bruce
Varley, Eric G


Cunter, Rt. Hn. R. J.
Milne, Edward (Blyth)
Wainwright, Edwin (Dearne Valley)


Hale, Leslie (Oldham, W.)
Molloy, William
Walker, Harold (Doncaster)


Hamilton, James (Bothwell)
Moonman, Eric
Wallace, George


Hannan, William
Morgan, Elystan (Cardiganshire)
Watkins, David (Consett)


Harper, Joseph
Morris, Alfred (Wythenshawe)
Watkins, Tudor (Brecon &amp; Radnor)


Harrison, Walter (Wakefield)
Morris, Charles R. (Openshaw)
Weitzman, David


Hart, Mrs. Judith
Morris, John (Aberavon)
Wellbeloved, James


Haseldine, Norman
Moyle, Roland
Wells, William (Walsall, N.)


Hattersley, Roy
Mulley, Rt. Hn. Frederick
Whitaker, Ben


Hazell, Bert
Murray, Albert
White, Mrs. Eirene


Healey, Rt. Hn. Denis
Neal, Harold
Whitlock, William


Henig, Stanley
Newens, Stan
Wilkins, W. A.


Herbison, Rt. Hn. Margaret
Noel-Baker, Francis (Swindon)
Willey, Rt. Hn. Frederick


Hilton, W. S.
Norwood, Christopher
Williams, Alan (Swansea, W.)


Hobden, Dennis (Brighton, K'town)
Oakes, Gordon
Williams, Alan Lee (Hornchurch)


Hooley, Frank
Ogden, Eric
Williams, Clifford (Abertillery)


Horner, John
O'Malley, Brian
Williams, Mrs. Shirley (Hitchin)


Houghton, Rt. Hn. Douglas
Oram, Albert E.
Williams, W. T. (Warrington)


Howarth, Harry (Wellingborough)
Orbach, Maurice
Willis, George (Edinburgh, E.)


Howarth, Robert (Bolton, E.)
Orme, Stanley
Wilson, Rt. Hn. Harold (Huyton)


Howell, Denis (Small Heath)
Oswald, Thomas
Wilson, William (Coventry, S.)


Howie, W.
Owen, Dr. David (Plymouth, S'tn)
Winnick, David


Hughes, Rt. Hn. Cledwyn (Anglesey)
Owen, Will (Morpeth)
Winterbottom, R. E.


Hughes, Hector (Aberdeen, N.)
Paget, R. T.
Woodburn, Rt. Hn. A.


Hughes, Roy (Newport)
Palmer, Arthur
Woof, Robert


Hunter, Adam
Pannell, Rt. Hn. Charles
Yates, Victor


Hynd, John
Park, Trevor
Zilliacus, K.


Irvine, A. J. (Edge Hill)
Parker, John (Dagenham)



Jackson, Colin (B'h'se &amp; Spenb'gh)
Parkin, Ben (Paddington, N.)
TELLERS FOR THE AYES:


Jackson, Peter M. (High Peak)
Parkyn, Brian (Bedford)
Mr. Lawson and Mr. Grey.







NOES


Alison, Michael (Barkston Ash)
Goodhart, Philip
More, Jasper


Allason, James (Hemel Hempstead)
Goodhew, Victor
Morgan, Geraint (Denbigh)


Astor, John
Gower, Raymond
Morrison, Charles (Devizes)


Atkins, Humphrey (M't'n &amp; M'd'n)
Grant, Anthony
Munro-Lucas-Tooth, Sir Hugh


Awdry, Daniel
Grant-Ferris, R.
Murton, Oscar


Baker, W. H. K.
Gresham Cooke, R.
Neave, Airey


Barber, Rt. Hn. Anthony
Grieve, Percy
Nicholls, Sir Harmar


Batsford, Brian
Griffiths, Eldon (Bury St. Edmunds)
Noble, Rt. Hn. Michael


Beamish, Col. Sir Tufton
Grimond, Rt. Hn. J.
Nott, John


Bell, Ronald
Gurden, Harold
Onslow, Cranley


Bennett, Dr. Reginald (Gos. &amp; Fhm)
Hall, John (Wycombe)
Orr, Capt. L. P. S.


Berry, Hn. Anthony
Hall-Davis, A. G. F.
Orr-Ewing, Sir Ian


Bessell, Peter
Hamilton, Marquess of (Fermanagh)
Osborn, John (Hallam)


Biffen, John
Hamilton, Michael (Salisbury)
Osborne, Sir Cyril (Louth)


Biggs-Davison, John
Harris, Frederic (Croydon, N.W.)
Page, Graham (Crosby)


Birch, Rt. Hn. Nigel
Harris, Reader (Heston)
Page, John (Harrow, W.)


Black, Sir Cyril
Harrison, Col. Sir Harwood (Eye)
Pardoe, John


Blaker, Peter
Harvey, Sir Arthur Vere
Pearson, Sir Frank (Clitheroe)


Body, Richard
Harvie Anderson, Miss
Percival Ian


Bossom, Sir Clive
Hastings, Stephen
Peyton, John


Boyd-Carpenter, Rt. Hn. John
Hawkins, Paul
Pike, Miss Mervyn


Braine, Bernard
Heald, Rt. Hn. Sir Lionel
Pink, R. Bonner


Brinton, Sir Tatton
Heath, Rt. Hn. Edward
Powell, Rt. Hn. J. Enoch


Bromley-Davenport, Lt. -Col. Sir Walter
Heseltine, Michael
Prior, J. M. L.


Brown, Sir Edward (Bath)
Higgins, Terence L.
Quennell, Miss J. M.


Bruce-Gardyne, J.
Hill, J. E. B.
Ramsden, Rt. Hn. James


Bryan, Paul
Hirst, Geoffrey
Rawlinson, Rt. Hn. Sir Peter


Buchanan- Smith, Alick (Angus, N&amp;M)
Hobson, Rt. Hn. Sir John
Rees-Davies, W. R.


Buck, Antony (Colchester)
Holland, Philip
Renton, Rt. Hn. Sir David


Bullus, Sir Eric
Hordern, Peter
Ridley, Hn. Nicholas


Burden, F. A.
Hornby, Richard
Ridsdale, Julian


Campbell, Gordon
Howell, David (Guildford)
Rodgers, Sir John (Sevenoaks)


Carlisle, Mark
Hunt, John
Roots, William


Carr, Rt. Hn. Robert
Hutchison, Michael Clark
Rossi, Hugh (Hornsey)


Cary, Sir Robert
Iremonger, T. L.
Royle, Anthony


Channon, H. P. G.
Irvine, Bryant Godman (Rye)
Russell, Sir Ronald


Chichester-Clark, R.
Jenkin, Patrick (Woodford)
St. John-Stevas, Norman


Clark, Henry
Jennings, J. C. (Burton)
Scott, Nicholas


Clegg, Walter
Johnson Smith, G. (E. Grinstead)
Sharples, Richard


Cooke, Robert
Jones, Arthur (Northants, S.)
Shaw, Michael (Sc'b'gh &amp; Whitby)


Cooper-Key, Sir Neill
Jopling, Michael
Sinclair, Sir George


Cordle, John
Joseph, Rt. Hn. Sir Keith
Smith, John


Costain, A. P.
Kerby, Cant. Henry
Stainton, Keith


Craddock, Sir Beresford (Spelthorne)
Kimball, Marcus
Stodart, Anthony


Crawley, Aidan
King, Evelyn (Dorset, S.)
Summers, Sir Spencer


Crosthwaite-Eyre, Sir Oliver
Kitson, Timothy
Taylor, Sir Charles (Eastbourne)


Crouch, David
Knight, Mrs. Jill
Taylor, Edward M.(G'gow, Cathcart)


Crowder, F. P.
Lambton, Viscount
Taylor, Frank (Moss Side)


Cunningham, Sir Knox
Lancaster, Col. C. G.
Teeling, Sir William


Currie, G. B H.
Langford-Holt, Sir John
Thatcher, Mrs. Margaret


Dalkeith, Earl of
Legge-Bourke, Sir Harry
Tilney, John


Dance, James
Lewis, Kenneth (Rutland)
Turton, Rt. Hn. R. H.


Davidson, James (Aberdeenshire, W.)
Lloyd, Ian (P'tsm'th, Langstone)
van Straubenzee, W. R.


d'Avigdor-Goldsmid, Sir Henry
Lloyd, Rt. Hon. Selwyn (Wirral)
Vaughan-Morgan, Rt. Hn. Sir John


Dean, Paul (Somerset, N.)
Longden, Gilbert
Vickers, Dame Joan


Deedes, Rt. Hn. W. F. (Ashford)
Loveys, W. H.
Walker, Peter (Worcester)


Digby, Simon Wingfield
Lubbock, Eric
Walker-Smith, Rt. Hn. Sir Derek


Doughty, Charles
McAdden, Sir Stephen
Wall, Patrick


Drayson, G. B.
MacArthur, Ian
Walters, Dennis


du Cann, Rt. Hn. Edward
Maclean, Sir Fitzroy
Ward, Dame Irene


Eden, Sir John
Macmillan, Maurice (Farnham)
Weatherill, Bernard


Elliot, Capt. Walter (Carshalton)
Maddan, Martin
Wells, John (Maidstone)


Eyre, Reginald
Maginnis, John E.
Whitelaw, Rt. Hn. William


Farr, John
Marples, Rt. Hn. Ernest
Wills, Sir Gerald (Bridgwater)


Fisher, Nigel
Marten, Neil
Wilson, Geoffrey (Truro)


Fletcher-Cooke, Charles
Maude, Angus
Winstanley, Dr. M. P.


Foster, Sir John
Maudling, Rt. Hn. Reginald
Wolrige-Gordon, Patrick


Fraser, Rt. Hn. Hugh (St'fford &amp; Stone)
Mawby, Ray
Wood, Rt. Hn. Richard


Galbraith, Hn. T. G.
Maxwell-Hyslop, R. J.
Woodnutt, Mark


Giles, Rear-Adm. Morgan
Mills, Peter (Torrington)
Worsley, Marcus


Gilmour, Ian (Norfolk, C.)
Mills, Stratton (Belfast, N.)
Wylie, N. R.


Gilmour, Sir John (Fife, E.)
Miscampbell, Norman



Glover, Sir Douglas
Mitchell, David (Basingstoke)
TELLERS FOR THE NOES:


Glyn, Sir Richard
Monro, Hector
Mr. Pym and Mr. R. W. Elliott.

Bill accordingly read the Third time and passed.

Orders of the Day — NOTICES OF MOTIONS (PRIVATE MEMBERS)

Motion made, and Question proposed,
That, during the present Session, paragraph (7) of Standing Order No. 5 (Precedence of Government Business) shall have effect with the substitution, for the words after questions', of the words 'at a time and place to be determined by Mr. Speaker;' and any notice of a subject to be raised on a motion for which such a ballot is held shall, notwithstanding the practice of the House, be given at the Table or in the Table Office not less than nine days before the day on which the notice of motion is to have precedence:
Provided that no such notice shall be given on a day on which the House does not sit. —[Mr. Grossman.]

Mr. Robert Cooke: On a point of order. It appears to me that the purpose of this Motion would be to

take the Ballot for Private Members' Motions away from the Chamber to some place far removed from the public gaze.

Mr. Speaker: Order. Is the hon. Member seeking to elucidate the Motion or to oppose it?

Mr. Cooke: Perhaps I might just conclude by saying that it is because it would appear that this is what the House is being asked to do, to take this time-honoured practice of having the Ballot in the Chamber away, that I and many of my hon. Friends find ourselves objecting to this Motion.

Mr. Speaker: Objection taken. What day?

Debate to be resumed Tomorrow.

Orders of the Day — REDEPLOYMENT

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Harper.]

10.13 p.m.

Mr. Kenneth Lewis: The subject of my Adjournment debate tonight is of considerable concern to all in the country, as my mail shows, and as is shown also by the mail of my right hon. Friend the Member for Leeds, North-East (Sir K. Joseph). The first thing that I should like to do is to congratulate the hon. Gentleman the Joint Parliamentary Secretary to the Ministry of Labour on his own redeployment. He and I have known each other for many years. He is the Member for the town where I was born and brought up until I was a young man and I have a great regard for him.
We knew the kind of situation that existed there before the war, when unemployment was very high, and when one talked about the difficulties of redeploying everyone. After the war there was a time when we talked about the redeployment of people over 50, and now it has gone down to the age of 40 and is a very serious problem. I am very glad to see my right hon. Friend the Member for Leeds, North-East in the Chamber. He also is concerned about this problem as a result of the letters he has received.
One has only to look at the advertisements in the "heavy" papers to see that there is a great demand for men aged 30 to 35, but hardly any jobs available in the executive, administrative and technical class for men over the age of 40. The situation would be bad enough at any time but it is made worse because of the squeeze and because of take-over bids.
It will also be made much more difficult in the next few months because it has recently been announced that 400 officers will leave the Army as a result of changes in the Territorial Army. Many of them will be over the age of 40 and looking for a job. In many ways this is the war generation, the people who got jobs after the war without the kind of advantages available today in higher education and which have been

available for the last 10 or 15 years. These men, often without great qualifications took jobs and they did them well. They are now at a time of life when their commitments are heavy, they have homes to keep, insurances to pay and families to educate.
There are many thousands of them being turned out of jobs partly because of the Government's policy and partly because of the amalgamations taking place in industry. The very advantages of industrial welfare which help so many are disadvantages to them. For example independent pension schemes in industry, which we have wanted for many years, and now have, make it very difficult for these men to get new jobs by transferring to other companies. The new company does not want to bring them in because transferability of pensions is not yet an accomplished fact.
Often insurance companies handling these union schemes take the line that all must be in the scheme, so that, although these men would willingly go to another job without asking for a renewed pension, they are not permitted to do so. The fact that there has been an increase in salaries in recent years also mitigates against their joining new firms, because there are new men coming up on lower salaries. The higher salaried man often finds that he must come down in salary and even this may be difficult because the firm does not want to employ a senior man who will drop to junior salary rate.
All of these things are making the problem very difficult. Today there are tens of thousands of 40-year olds and over unable to find jobs. It is worse for the executive and administrative type. Only to some extent does this apply to the artisan—here more often at the age of over 50. This is a matter for Government retraining schemes.
What is to be done? There are four things which the Government ought to consider and on which they should take action. First, they must seek to match the jobs to the men, where the jobs are available. Secondly, they must put some boost into increasing training facilities. Thirdly, they ought seriously to consider better training grants for men who have families. Fourthly, they should make it easier for older men to change jobs.
I will take those four points one at a time. The matching of jobs to men is the core of the problem. This is the greatest challenge to the Government, because it only needs action on their part to deal with it. It is the responsibility of the employment exchanges and the Professional and Executive Register. The employment exchanges deal with the artisan, with the skilled and the semiskilled man; the man on the shop floor. They are in every area and there is no need to increase their numbers, but better information should be provided by each exchange not only about jobs in the area, but about jobs in other areas. Lack of this information is the great weakness at the moment.
Men who go to their employment exchanges are often offered jobs in their own areas. Sometimes they are offered jobs in other areas, but frequently they are not. The matching of jobs in the Midlands to people in the North, or jobs in the Midlands to people in the South, and jobs in the South to people in the Midlands is so irregular that it is a disadvantage to any man who is seeking a job and who is prepared to move away —and the Government want and the country needs mobility of labour—for it is not easy for him to find out just where the job for him is if it happens to be away from his home. Every year 8 million people in this country change their jobs—it is a fantastic number—and it is vitally important that the right jobs be matched to the men.
The Professional and Executive Register deals with the administrator, the technical man of the administrative type, and the executive. The people working for this Register do their best, and I would be the last to suggest that they do not, but in this modern age the Register is not with it. I looked up some figures which show Register placings from July to September, last year. In the whole country there were some 22,000 applications and just over 1,800 placings, which is less than 10 per cent. Many of the men found jobs themselves, but the organisation provided by the P. & E. Register provided less than 10 per cent. of the placings. The Register does not advertise jobs. Nowadays, it is in competition with the free enterprise agencies, which do a first-class job, and the Minis-

ter should seriously consider the advertising of jobs by the Professional and Executive Register.
I would go a great deal further than that. If I were the Minister, I would destroy the present system altogether and go to the C.B.I. and ask, "Would you agree to set up, jointly with the Government, a professional and executive register?". One of the weaknesses of the present Register is that the jobs do not flow into it and that is why these chaps cannot be provided with jobs. On the other hand, with a register such as I have suggested the Ministry would be working with the C.B.I. and be complementary to the free enterprise employment agencies which sell jobs. The presence of industry in this field would help to bring in the jobs and would provide the openings required.
I take the second and third points together, to improve training facilities and to give increased grants. In training, the Government are relying far too much on giving grants to industry and asking it to get on with it. There must be a considerable expansion in Government training facilities, which are wholly inadequate for the demands made on it for the state of the employment market, and, in particular, there must be talks with the unions to get them to accept older trained men as dilutees. There is a certain resistance to this, and I hope that the Ministry will persuade the unions to be more forthcoming in this direction.
When dealing with a man of 40 or 50 years of age—and in the artisan class many of these men are usually over 50—it must be considered whether it is necessary to weight the grant higher for him according to his family responsibilities. The only way in which he can train for any length of time and acquire a new skill—and we need new skills—is if he feels that he has an adequate income to provide for his wife and family. The Government might also seriously consider giving special family grants to some of the executive types coming out of industry so that they can train to be school teachers. We are short of teachers in the schools. There is a good deal to be said for people who have spent their working lives in industry coming into, for example, the technical


colleges and passing on the practical lessons which they have learned. But they must have additional assistance if they are to do this at their time of life.
Fourthly, and finally, we should make it easier for people to change their jobs. This brings in the whole question of the transferability of pensions. We discussed this when the Conservatives were in government and we did not make a good deal of progress. The present Government have not made much progress either. It is interesting that Government Departments, which are supposed to give a lead, do not do so. I had a case in my constituency of a man who wanted to leave the Post Office and to work for the Ministry of Public Building and Works. He was offered a job. The Ministry wanted him, and he wanted to go, but he could not go because the Post Office would not agree to the transfer of his pension. If the Government do not give a lead, how can they expect free enterprise to do so?
Then there is the question of housing. There should be a register kept so that people do not have to go to estate agents when they want assistance in getting a house. Perhaps that is a matter for private enterprise.
This is a problem which affects many people. It does sometimes cause people in difficulty and trouble when looking for a new job to spend money when they should not do so. Some of the private agencies are very good, but recently there have been examples of American agencies coming over here and asking for sums ranging from £100 to £300 with offers that for this they would look for a job for the people interested in going to the United States. My advice to people who are asked to give that kind of money for a job overseas is to keep their money in their pockets.
We have a brain drain which will get bigger unless we do something about placing the people of 40 and 50 years of age. A young man of 30 employed in a firm who sees his boss or one of his colleagues thrown out at 40 or 45 years of age will say, "I had better get out before this happens to me". This problem should be tackled by the Government. They should not allow it to drift. The basis of their action should be to

seek to put the jobs to the men by modernising the professional and executive register. The hon. Gentleman has been redeployed in a new job at an age much beyond the age of 40, and I congratulate him. This is a time when people think in terms of anybody being more active, more vital, more energetic and more valuable at between 30 and 35, and yet we have a man of 65, Francis Chichester, sailing round the world by himself. These men between 40 and 50 can give much to the country, and I hope the Government will see they are given the opportunity.

10.30 p.m.

The Joint Parliamentary Secretary to the Ministry of Labour (Mr. E. Fernyhough): I should like to thank the hon. Gentleman the Member for Rutland and Stamford (Mr. Kenneth Lewis) for the kind words he said at the commencement of his speech. He will know, because he was born, bred and reared in the town which I have represented in this House for 20 years, that the problem he has raised is not new to me. I have lived with it for 20 years. Because of the fears of the over-forties who find themselves without employment I think it is very right and proper that the hon. Gentleman should have raised this matter tonight.
I wonder, first of all, whether he realises that to carry out any of the suggestions and recommendations he has made we would have to increase the number of civil servants and increase Government expenditure? He would be talking with two voices. He will agree that an increase in civil servants would be necessary, and he will agree that if the four major points he made are to be carried out it will entail a further increase in Government expenditure, and I hope he will gladly support it, as I would.
The subject which the hon. Gentleman has raised is one about which the Ministry has been concerned for a long time. Our statistics show that people over 45 are less apt than younger people to become unemployed, but when they do lose their jobs they have much more difficulty in finding another, and tend, on average, to remain unemployed for a longer period than younger people. This is the position both in good times and


bad, although, of course, the total numbers of older people unemployed will be higher when times are bad.
As long ago as the early 1950s there were two reports on this problem, published by the National Advisory Committee on the Employment of Older Men and Women. These emphasised that many of the age limits imposed by employers when recruiting staff were quite unjustifiable, that older workers should be given a fair chance on their merits to compete for available jobs, and that the test for engagement and employment should be capacity and not age. In accordance with these recommendations, Ministry of Labour officers have since that time made it their policy to dissuade employers from imposing arbitrary age limits. Even when an age limit has nevertheless been imposed workers outside that age limit have been submitted if they have had the necessary qualifications. It is perfectly true to say that this policy has met with some success, but there is still, undoubtedly, a good deal of resistance among employers.
This is particularly so in non-manual occupations, including those of the kinds dealt with by our Professional and Executive Register. There has been a good deal of newspaper and, today, even radio comment about redundancies among men holding senior posts, and I know from the Question which the hon. Gentleman asked on 12th December that he is concerned with this problem. It is true that, whereas the numbers of employed men on the Professional and Executive Register have remained more or less stationary at about 12,500 over the past few months, the numbers of unemployed men on the Register have increased from just over 8,000 in June to nearly 10,000 in December. This represents a smaller percentage increase than the general increase in the registered unemployed over the same period. Nevertheless, I agree that the figures show a waste of qualifications and experience which the country can ill afford.
We have no statistics to show exactly how many of these registered as unemployed on the Professional and Executive Register are over 40, but we know that they form a substantial proportion. The staff of the Register has recently been increased, partly to make allowance for

the fact that there is this substantial proportion of older executives for whom special efforts may be needed. In fact, numerous placings of persons over 45—many well over this age—are made by the Register all the time, sometimes in cases where the employer had originally asked for a much younger person. If time permitted, I could quote one or two examples of placings made during the past year.
Perhaps I may now return to the problems of older unemployed workers generally. A number of measures have been introduced by the present Government which have to some extent mitigated their financial hardships. Redundancy payments under the Redundancy Payments Act are higher for those employees with service with an employer between 41 and 64 years of age.

Sir Keith Joseph: The hon. Gentleman seems to have finished with the P. and E. Register. Can he tell us whether his right hon. Friend has any thoughts about adopting the suggestions of my hon. Friend the Member for Rutland and Stamford (Mr. Kenneth Lewis) about making the Register's work more positive, possibly adopting advertising, or any other techniques to try and place men more than it is doing now?

Mr. Fernyhough: I am sure that, when my right hon. Friend's attention is drawn to the suggestions which the hon. Member for Rutland and Stamford has made, if possible, he will carry out some of them. We have increased the number of people dealing with the Register. We could advertise, but the right hon. Member for Leeds, North-East (Sir K. Joseph) must admit that, good as these suggestions are, they will all necessitate an increase in Government expenditure. I hope that, when we make that increase, there will be no quarrel from right hon. and hon. Members opposite that we have done so, and that they will readily vote for the necessary Estimates for that purpose.

Mr. Eldon Griffiths: I, for one, shall not be supporting any increased Estimate for more civil servants. We have far too many already. The point is that the employment exchanges, which do a good job, should do a better job with their existing


staffs for older workers, and not take on extra staff to do the same job.

Mr. Fernyhough: That is very ungenerous. I am sure that the people doing this work are doing as good and effective a job as anyone can. I am sure that the comments of the hon. Member for Bury St. Edmunds (Mr. Eldon Griffiths in respect of this section of the Civil Service are quite unjustified and unworthy of him.

Sir K. Joseph: Will the hon. Gentleman suggest to his right hon. Friend that the Organisation and Methods Department of the Treasury, or some consultants, night go in to consider the techniques used by the P. and E. Register since it has been very effectively, though I think sympathetically, criticised by my hon. Friend and by certain articles in the Press, and these have an effect on the older men. We would like to feel that the Minister was going to try to do something about it.

Mr. Fernyhough: The Minister is doing far more about this than was done by any previous Minister, and the figures show that. There can be no argument about the number of placings over the last two years compared with previous years.
Perhaps I might be allowed to get on with my speech without any more interruptions, because I have quite a lot to say.
The Minister is concerned about the problem of housing. We have already had discussions with the Ministry of Housing and Local Government and the local authority associations about relaxing policies which are restrictive of industrial mobility, and the Government have decided that the categories of people to whom local authorities may advance mortgages should include workers moving into a new district. The Ministry has issued circulars to local authorities on these two matters in the last few days. Under the Ministry of Labour Resettlement Transfer Scheme an unemployed or redundant man moving

to a new area can get help with fares, removal expenses, and legal costs in buying or selling a house, and may receive lodging allowance during any period between his taking a job and being able to move his family.
There are other Ministry of Labour services which can, and do, help the older unemployed worker. There are now far more Government Training Centres, to which the hon. Gentleman referred, which give courses of accelerated training, usually of six months' duration, for a wide variety of skilled trades, and further centres are being planned. This means that training is now widely available in all parts of the country, and this should help the older man who needs training, since it is more difficult for him than it is for a young man to leave home to take a training course.
There has never been an age bar to the courses in these training centres, and, with the recent expansion, the Ministry's employment officers have been told especially of the need to bring training opportunities to the attention of older persons so that they may be given the same chance as younger people.
Another Ministry of Labour service, which is also being expanded, is that of the Industrial Rehabilitation Units. The aim is to try, in these, to find out the capacity of the individual, to give him the kind of advice that he needs, and to help him to find the kind of job to which his capacity is fitted. These units have a very good record in finding employment openings for those who complete the courses. They are primarily intended for the disabled, but they have always been open to other persons with employment difficulties, and it has recently been decided that they should in future admit more—

The Question having been proposed after Ten o'clock and the debate having continued for half an hour, Mr. DEPUTY-SPEAKER adjourned the House without Question put, pursuant to the Standing Order.

Adjourned at seventeen minutes to Eleven o'clock.